The United States has suffered a new setback in a four-year legal battle with Antigua and Barbuda over U.S. restrictions on Internet gambling, a U.S. trade official said.
At issue is an April 2005 World Trade Organization ruling against U.S. prohibitions on online horse-race betting. Since then, the U.S. Congress has passed additional legislation to ban betting over the Internet.
Gretchen Hamel, a spokeswoman for the U.S. Trade Representative’s office, confirmed Thursday the press reports that a WTO panel “did not agree with the United States that we had taken the necessary steps to comply” with that ruling.
At the same time, Hamel downplayed the decision contained in a preliminary, confidential report to the two parties.
“The panel’s findings issued today involve a narrow issue of federal law” and the United States will have opportunity to submit comments to the WTO before it issues its final, public report in March, Hamel said.
The issue is a touchy one for the Bush administration, which supports free trade but whose conservative allies in Congress late last year pushed through a bill to ban most forms of Internet gambling.
Antigua and Barbuda, a Caribbean island nation with few natural resources, has sought to build up an Internet gambling industry to provide jobs to replace those in its declining tourist industry.
It argued in a case first brought to the WTO in 2003 that U.S. laws barring the placing of bets across states lines by electronic means violated WTO rules.
An April 2005 ruling by the WTO’s Appellate Body, which both sides claimed as vindication, focused on the narrower issue of horse racing, saying that foreign betting operators appeared to suffer discrimination.
Antigua and Barbuda complained the United States had not complied with the decision. The WTO agreed in July 2006 to look into the matter, resulting in the ruling on Thursday.
The United States will decide after the final panel decision ruling in March whether to appeal.
Source: News.com

A Nigerian convicted of running a sophisticated identity theft ring that stole the personal data of online gamblers registered with BetonSports was sentenced today to 34 months in prison.
Lanre Elekede, 32, is the lead defendant in the case in which he pleaded guilty to stealing the identity of at least 175 individuals. According to the Department of Justice (DoJ), a many of the victims were BetonSports customers.
The London-based gambling firm and several of its executives, including former CEO David Carruthers, is under U.S. federal indictment on numerous counts of racketeering, conspiracy and fraud. In November, the company agreed to a permanent injunction barring the company from doing business in the United States.
Elekede’s theft of BetonSports users’ personal data occurred in the weeks before the company became enmeshed in its legal battle with U.S. authorities.
A DoJ statement on Elekede’s conviction states, “A common thread linking a number of the victims whose identities were compromised was that they had engaged in sports-related gambling over the Internet with a…website known as BetonSports.com.”
The data from BetonSports included users’ names, addresses, telephone numbers, Social Security numbers, credit card numbers and mother’s maiden names.
The DoJ said Elekede and his confederates used the stolen personal information to commit various forms of fraud, including making illegal purchases over the Internet. They also shared the stolen data over the Internet with other members of the ID theft ring.
BetonSports’ woes began when U.S. authorities arrested Carruthers in Fort Worth, Tex., while changing planes en route from London to Costa Rica, where the company then maintained several of its sites. According to the DoJ’s indictment, BetonSports in 2003 had 100,000 active players who placed 33 million wagers worth $1.6 billion through the company’s Web sites.
Carruthers, BetonSports and 10 others, including BetonSports founder Gary Kaplan were named in the DoJ indictments. The DoJ contends BetonSports violated U.S. law by taking sporting bets over the telephone and Internet. The government also claims BetonSports failed to pay excise taxes on more than $3.3 billion in wagers taken from U.S. gamblers.
Kaplan remains at large, variously reported in Spain, Israel, Costa Rica and Zimbabwe.
According to the DoJ, Kaplan launched his gambling business through a sports book in New York City in the early 1990s. After he was arrested on New York gambling charges in 1993, Kaplan moved his operation to Florida and finally offshore to Costa Rica. He sold his company in the early 2000s to the English company that took it public in 2004.
BetonSports saw its stock permanently suspended two days after Carruthers’ arrest.
Source: Internetnews

The game is now over for New Yorkers who like to gamble online.
While it has been illegal to do so in the state for some time, many people found ways around in the past, by placing bets with sites through off-shore companies.
But as NEWS10’s Dori Marlin reports, a new law in effect this week essentially takes the sites off-line in New York.
The new law went into effect this past Monday at 9pm, making New York one of just 13 states no longer allowing companies to process bets that are placed online. What that means now:
While before, it was illegal to gamble online, but people still found a way to place bets…
Now, in the state, the sites literally will not let you log in and gamble
“I’d play free rolls every day just to kill time,” says online gambler, Steve Douglas.
Many, like 24-year-old Steve Douglas of Albany, are upset with the change.
“Not everybody has the opportunity to go to Turning Stone, or even start a home game whenever they feel like it,” Douglas says.
But experts say that is part of why the state wants to stop the sites in the first place – they are simply too accessible.
“We certainly know that people are engaged in various forms of online gambling,” says UAlbany Associate Professor, Dr. Matthew Martens.
Dr. Martens specializes in counseling psychology, and explains why it is a problem.
“It’s gonna’ lower the prevalence of people getting involved in this type of gambling, simply because it’s gonna’ be harder for people to access the sites,” Dr. Martens says.
However, many of the sites are trying to find a way around the law once again, to get regulars like Steve back in their stable.
Source. WTEN, Albany

NEW YORK, Jan 24 (Reuters) – A U.S. judge on Wednesday set Feb. 14 as the date for a preliminary hearing for the two founders of UK payment processing company NETeller Plc (NLR.L: Quote, Profile , Research) who are charged with handling billions of dollars in gambling wagers and winnings.
The decision sets the stage for further federal court proceedings in the case against NETeller founders, Canadians John Lefebvre, 55, and Stephen Lawrence, 46, who were arrested earlier this month as U.S. authorities continued their crackdown on Internet gambling.
The magistrate judge at the U.S. Court for the Southern District of New York extended Lefebvre’s $5 million bail during a brief hearing on Wednesday. Lawrence appeared in court last week, when his bail was also extended.
Under the terms of the bail, Lefebvre has surrendered his travel documents and is restricted to traveling within parts of New York and California.
The government would have to file formal charges before the Feb. 14 hearing, said Lefebvre’s lawyer Vincent Marella.
Lefebvre declined to comment after the hearing.
If convicted, Lawrence and Lefebvre each face up to 20 years in prison.
Money transfer companies such as NETeller, based in the Isle of Man, allow gambling companies to transfer money collected from U.S. bettors to overseas bank accounts.
Most online gaming executives have avoided traveling to the United States since the crackdown on Internet gambling began last year with the arrest of BETonSPORTS’ (BSS.L: Quote, Profile , Research) David Carruthers.
Source: Reuters

The founder of a money transfer company is arrested and charged with laundering billions of dollars from illegal online gambling proceeds-a move by the feds who are cracking down on online gambling in the United States. Some companies, which receive most of their income from the industry, have lost billions since an anti-online gambling bill was signed into law last year.
By Laura Tate / Editor
Malibu homeowner John Lefebvre, a Canadian national, was released on a $5 million U.S Bond following his arrest last week on charges of allegedly laundering billions of dollars in illegal online gambling proceeds. Canadian Stephen Lawrence was also released on $5 million bail.
The two are former directors of NETeller, a company that transfers money globally for a fee. Lefebvre and Lawrence are accused of using the Internet payment services company to facilitate the transfer of billions of dollars of illegal gambling proceeds from the United States to Internet gambling companies overseas.
A former lawyer, Lefebvre launched NETeller in 2000, which was essentially a Web database that functioned as the middleman between companies operating online gambling casinos and offshore bank accounts.
The U.S. Attorney’s office stated in a press release that, “According to NETeller’s 2005 annual report, Lawrence and Lefebvre, through NETeller, provided payment services to more than 80 percent of worldwide gaming merchants.”
Lefebvre, according to the U.S. Attorney’s office, served as president of NETeller from 2000 to 2002, and was a member of the Board of Directors until approximately December 2005.
Reuters reported last week that the company closed its U.S. Internet gambling services on Thursday, causing it to lose more than 65 percent of its business. Shares in NETeller had fallen by 60 percent since September, following the passage of the Unlawful Internet Gambling Enforcement Act, and the arrests of two British executives from companies that were involved in online casinos. The anti-online gambling law makes it illegal for banks, credit card companies and online payment systems to process payment to online gambling companies. Nearly $8 billion in market value of shares in publicly traded companies such PartyGaming and Sportingbet were wiped out following the law’s passage.
The U.S. Attorney’s office reported that in 2005, NETeller processed more than $7.3 billion in financial transactions, and that, according to reports issued by NETeller, 95 percent of its revenue came from money transfers involving Internet gambling companies. In the first half of 2006, NETeller processed $5.1 billion in financial transactions, prosecutors said. As charged in the U.S. Attorney’s complaint, 85 percent of the company’s revenue from that period came from gamblers in North America, and approximately 75 percent of its North American revenue was generated in the United States.
“Internet gambling is a multibillion-dollar industry,” stated FBI Assistant Director Mark Mershon. “A significant portion of that is the illegal handling of Americans’ bets with offshore gaming companies, which amounts to a colossal criminal enterprise masquerading as legitimate business. There is ample indication these defendants knew the American market for their services was illegal. The FBI is adamant about shutting off the flow of illegal cash.”
Since the arrest of two other former online gambling company executives in September, including Sportingbet chairman, Peter Dicks, most online gambling executives have been avoiding the U.S. However, this did not deter Lefebvre, who was arrested at his Malibu home last Tuesday, from staying away from the States.
In an Oct. 14, 2005 story from the University of Calgary campus newspaper, Lefebvre’s alma mater, he is described as a “man embodying the spirit of a generation.” Lefebvre donated $1.2 million to its fine arts faculty in 2005.
The article goes on to tell the rise, fall and then rise again of Lefebvre. According to the On Campus Weekly story, Lefebvre was “a lawyer by trade and a frustrated musician by passion.”
Lefebvre’s father died when he was 3, writes Tom Maloney, and his mother raised he and his two siblings while returning to school and earning an education degree and a master’s in counseling. After graduating law school, Lefebvre ended up running a storefront law clinic and then eventually worked from home.
“One of the reasons I didn’t get dragged into the downtown, upper-crust, law-circle things is, I never really did concede to working the long hours, as much as I could have or maybe should have,” he is quoted in the U of C newspaper. “It was always more compelling for me to get home to see my daughter.”
Facing a midlife crisis in his ’40s, he quit his job as lawyer and then begged in the train stations of Calgary for change to buy food, according to the campus newspaper. He ended returning to legal work to pay back friends and then met up with a former client, who later became chairman of NETeller, Stephen Lawrence. Lawrence was operating an online casino in Costa Rica, and wanted a more efficient money transfer system. Lefebvre worked with a computer programmer and built NETeller. The company gained a percentage off each transaction from the casinos, smaller than what the casinos had to pay credit card companies, and it provided better security against fraud.
Two years ago the company, based on the Isle of Man in the U.K. and listed on the London Stock Exchange, had a user base of two million customers worldwide and 1,700 merchant clients, according the U of C newspaper.
Trading of NETeller’s shares was temporarily suspended on Jan. 16, following the arrests of Lefebvre and Lawrence. A press release from the company was listed on the London Stock Exchange stating that other than as shareholders, neither of the two have any current position or connection to NETeller.
Lefebvre is to appear in Manhattan Federal Court Wednesday to have his bail terms reviewed. Although a Los Angeles federal judge ordered him not to leave Los Angeles, except to make his Manhattan appearance, he was also ordered not to leave New York before the end of February.
Source: Malibu Times

Like a brightly colored alien race descending for the Super Bowl, 8-foot-tall machines will be cropping up in casinos across Nevada, beckoning gamblers to make sports bets as quickly as withdrawing cash at an ATM or placing an order at a fast-food drive-through.
Called “iSports Stand,” these sports betting kiosks are like ATMs on steroids. They feature large touch screens and video monitors that flash as many as 50 ads every few hours – pitches that historically haven’t been welcome inside casinos.
Besides the betting action, gamblers can click on ads that pop up on the screen, printing out 2-for-1 coupons and other offers from local mom-and-pop businesses and national chains.
Like other advancements in casino technology over the years, the kiosks – more than three years in development – will replace some work now done by casino employees and allow gamblers to place their bets faster and more conveniently.
The devices can go anywhere in a casino – near the buffet line or near retail stores. Winners will be given credits, which they can cash out with a cashier or use for more betting.
Like movie ticket terminals that have sprung up outside cineplexes, the iSports Stand also has other functions for those who aren’t wagering-inclined. Slip in some cash and you can buy a show ticket or book a tee time at the casino’s golf course.
Bill Stearns, president of kiosk manufacturer ISI Ltd. of Las Vegas, says the machines won’t fully replace the sports book experience.
“Similar to banks, bank tellers still exist and have their functions,” Stearns said. “We’re ATMs for sports books.” Stearns said he expects sports wagering to increase overall as betting becomes more convenient.
As a rule, faster-moving games make more money for casinos. But there’s a side benefit to 24-hour betting kiosks besides the fact that they don’t take vacations or get sick. A 40 percent chunk of the advertising revenue from the sale of space on the touch screen as well as a video monitor at the top of the machine goes to casinos – revenue that can pay for the machine in a few months. Excluding that revenue, casinos pay $900 per month to lease the kiosks.
More than 30 Nevada casinos are renting the kiosks, including the Sahara, Riviera, Tropicana and the Silverton.
The machines were developed in partnership with American Wagering, a public company that owns more than 60 race and sports books in Nevada through its Leroy’s subsidiary and supplies most of the hardware and software Nevada casinos use to process sports bets.
Source: Las Vegas Sun