Three years of patience and strong lobbying in
the corridors of US political decision making appear to be paying
off for UK-based online payments processor SecureTrading, as
Congress prepares to pass federal legislation to regulate online
gambling.
It is anticipated the legislation will greatly
moderate the draconian approach of the Unlawful Internet Gambling
Enforcement Act (UIGEA) which outlaws all online gambling – with
the exception of horse racing and lotteries.
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In anticipation of change, SecureTrading has
launched a US subsidiary to allow licensed companies to serve the
US market once it becomes regulated.
“Momentum for regulating internet gambling in
the US has been building for some time,” said Chris Thom, who has been appointed as chairman of
SecureTrading’s new US subsidiary.
“As Congress prepares to take the final step,
SecureTrading Inc’s turnkey system is primed to enable our
customers to go live the moment Internet gambling is
regulated.”
Services which SecureTrading intends to offer
include player registration, verification and validation to ensure
that the player is not underage and is in a location where online
gambling is legal.
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By GlobalDataThe company will also provides financial
payments processing, anti-money laundering and fraud tools, tax
computation and collection, payment and reporting.
As a feature to promote responsible gambling,
SecureTrading has also created tools that will allow players to
self-exclude from online gambling activity.
SecureTrading has lined up a formidable team
for its assault on the US market. Prior to joining SecureTrading,
Thom was chief risk officer at MasterCard, a position he held for
11 years. Before joining MasterCard, Thom served as a senior
executive at UK bank HSBC.
As COO, SecureTrading has appointed
Ted Friedman who previously worked
at MasterCard and Europay International in Belgium.
At MasterCard, he served as the global head of
credit products and senior vice president, change management. At
Europay, he was the Head of corporate strategy.
As head of customer sales and support at the
new US unit is TJ Sharkey who
previously spent 17 years at MasterCard.
Most recently he was group head of global
merchants and acquirers while previous responsibilities included
strategy, sales, business development, corporate and regional
finance and internal audit.
Welcome change
The UIGEA prompted European online
gambling and betting companies to exit the US market in 2006,
though some have still suffered legal proceedings by US authorities
based on their past activities in the US.
This has prompted the European Commission to
voice its strong opposition to US online gambling laws as they now
stand.
A number of online payments service providers
have also been the subject of harsh enforcements.
In 2009, for example, a Southern District of
New York federal prosecutor froze bank accounts of payment
processor Allied Systems, containing some $34 million in poker
players’ deposits and payouts.
In another high profile enforcement, the
Federal Bureau of Investigation (FBI) has charged Canadian-based
Douglas Rennick with bank fraud and other offenses related to his
alleged role as the owner of two online processing companies that
processed some $350 million for internet gambling companies.
In the ongoing case, the FBI has called for
Rennick to receive a 55-year prison sentence.
The anticipated change to US online gambling
legislation will be a product of The Internet Gambling Regulation,
Consumer Protection and Enforcement Act of 2009.
The act was introduced in May 2009 by
Massachusetts Congressman Barney
Frank, who has spearheaded the assault on the UIGA.
If passed, the act will establish a framework
to permit licensed gambling operators to accept wagers from
individuals in the US.
The legislation will also introduce an array
of consumer protections and allow states to determine whether to
allow internet gambling activity for people accessing the internet
within the state. The state will also be able to apply restrictions
on the activity if deemed necessary.
Indicative of the potential of the US online
gambling market, gambling industry research firm Christiansen
Capital Advisors estimates that annual spending by US consumers on
online gambling could be reduced by up to $10 billion if
enforcement of the UIGEA was totally effective.
