August 31st, 2009 by admin

Earlier this year, the Southern District of New York engineered a controversial crackdown on U.S. poker players. In the end, more than $30 million heading to or from over 24,000 player accounts was seized. Under the UIGEA, it is illegal for banks in the United States to transfer funds to or from an online gambling establishment. Government officials used this law to justify seizing funds from two California bank accounts belonging to Account Services, a San Diego-based company that processes funds transfers for American poker players.

On Thursday, legal representation for both Account Services and the Poker Players Alliance went before U.S. District Court Judge Jeffrey Miller to request that at least $13 million be returned to the players, since the players themselves did not violate UIGEA laws. While illegal gambling, fraud and money laundering charges have been filed against Account Services owner Douglas Reddick, no charges have been brought against the affected players, leaving the world to wonder why their money cannot be released. It’s a question the prosecution has never fully answered.

Thursday the PPA presented several arguments on the players’ behalf, but because online poker is such a gray area in the U.S., Judge Miller ruled against releasing the requested funds. The San Diego Union-Tribune predicted that it could now be “years” before the players see their sequestered money again. While the PPA vowed to forge ahead in their efforts to see the players reimbursed, they were at a loss to explain just how they planned to do that.

August 11th, 2009 by admin

The United Kingdom’s ambivalence toward lowering taxes applied to online gambling operations has cost their treasury yet again. Over the weekend the UK’s biggest online sportsbook — Ladbrokes— announced that it will be moving its operations to Gibraltar.

While based in the UK, the company has been subject not only to the traditional corporate taxes but also to two additional 15% taxes for gross profits and VAT plus an extra 10% horse race betting levy. In Gibraltar, taxation of online gambling operations is limited to a 1 to 2% corporate rate. In other words, this move will save the company (and cost the UK) millions.

The announcement was no doubt sour news for the UK treasury coming on the heels of a similar announcement from another major UK sportsbook, William Hill. Both companies insist that the move is necessary if they are to stay competitive with other offshore gambling operations, but some industry insiders speculate that the move is more about future money than current taxes. Should the U.S. pass its pending online gambling legislation this fall, both companies would be well-positioned to stake a claim in the new American gambling market.