 Barclays
and Royal Bank of
Scotland to halt
online gambling
transactions:
NETeller could
follow suit
Barclays (BARC.L:
Quote, Profile,
Research) and Royal
Bank of Scotland (RBS.L:
Quote, Profile,
Research) will
shortly advise
corporate customers
to avoid taking
Internet bets from
the United States,
banking and gaming
industry sources
said on Thursday.
"The two banks will
be telling corporate
clients they're not
prepared to do
business with
companies that take
online bets from the
United States," said
a gambling source.
"Then they'll look
at ways of stopping
(U.S.) retail
customers from
online gambling."
Gambling companies
were left in shock
last week after the
U.S. Congress
unexpectedly passed
a bill making it
illegal for banks or
credit card
companies to process
payments to online
gaming firms.
The measure has been
passed to U.S.
President George W.
Bush to sign into
law, which the
industry expects on
Friday.
"Once the Unlawful
Internet Gambling
Enforcement
provision has come
into force on
President Bush's
signature, it will
be illegal for an
online gaming
company to accept
payment in
connection with
unlawful Internet
gambling," said a
Barclays spokesman.
"We are therefore
contacting our
customers to ensure
that they will
conduct their
business and
operations in full
compliance with the
legislation," he
added.
An RBS spokeswoman
said: "The Royal
Bank of Scotland
Group will take the
necessary steps to
ensure that we are
fully compliant with
this legislation."
Gambling sources
said both banks were
expected to ask
corporate customers
to find new banking
facilities if they
were not closing
their U.S.
operations.
Sources said other
major banks were
likely to follow
suit to avoid any
legal or
reputational risk.
British online money
transfer firm
Neteller Plc (NLR.L:
Quote, Profile,
Research), which
does a lot of
gambling business,
says it is reviewing
the situation and
would have a clearer
view when
regulations are
drafted in the 270
days after the act
becomes law.
RBS owns Citizens
Financial Group,
which is the eighth
biggest commercial
bank in the United
States in terms of
deposits. It has
more than 1,600
branches operating
across 13 states,
and has non-branch
retail and
commercial offices
in about 40 states.
(Reporting by Pete
Harrison and Steve
Slater)
---
Reuters
Originally published
October 12, 2006
11:06 am ET
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