Citadel Being Forced To Pay To Avoid Prosecution

Published on: June 9, 2008 

The passing of the UIGEA in the United States two years ago sent the online gambling world spinning on its proverbial ear when it rules that credit card companies and financial institutions were not allowed to accept transactions from online gambling sites on their player’s behalf.  Now in an interesting – and not largely covered – turn of events, the United States is issuing lawsuits against some of the more popular online gaming funding companies.   

The newest member of the online electronic community that is being chased after by the United States is Citadel, a popular third party payment processor.  Already Neteller has been brought up on charges as well as other payment processors.  The difference between the two cases however is noticeable.  Neteller’s former founders were arrested in the United States and brought before a judge for prosecution of knowingly processing illegal online gambling transactions from American citizens.  Citadel Commerce, the electronic wallets parent company, went to the American prosecutors in an effort to arrange and settle a fine agreement before things progressed any further.

Neteller and Citadel had been two of the top electronic wallets that dealt with online casinos and poker rooms prior to the UIGEA being passed.  Together the two companies have processed over $2 billion in player transactions between 2003 and 2007.  Citadel continued servicing American customer well after Neteller was taken down and they were given warnings by the government.  They finally stopped accepting American customers even after American officials claimed that they ‘always had laws in place’ that made both electronic wallet company’s transactions illegal.

ESI Entertainment System Inc., Citadel Commerce’s parent company, claims that United States officials got them to admit to criminal wrong doing and wilful violation of American law.  The settlement is to be $9.1 million and it will keep Citadel from going to prosecution on conspiracy charges as long as the company avoids any wrong doing in the next 18 months.  Incidentally, Neteller was forced to pay $136 million.

Electronic wallets are not the only companies being slammed by the United States under the auspices of the UIGEA ruling.  Numerous online gambling and betting sites have been forced to pay restitution for the money they accepted from American players.  How long the United States will be able to go without gambling legislation is questionable considering the World Trade Organization is investigating the UIGEA and it’s legality under free trade agreements made with the United States.

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