Neteller £12.3m in the red
By Sophie Brodie
Last Updated: 2:04am BST 24/08/2007
Neteller, the online payments business for the gaming industry, has plunged into the red after being forced to close its US business.
The company has posted a first-half pre-tax loss of $24.7m (£12.3m), compared with $58m last year, after it stopped processing US payments in January. Revenues declined 57pc to $50.8m.
The US withdrawal followed a Federal government crackdown that led to several high-profile arrests in the online gambling industry. The previous October, President George Bush made it illegal for banks and credit-card companies to handle payments for gambling websites.
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Among those arrested were Neteller's Canadian founders Eric Lawrence and John David Lefebvre. They were charged with conspiracy in connection to the transfer of billions of dollars of internet gambling proceeds. After pleading guilty, they could face up to five years in prison.
Chief executive Ron Martin said yesterday the company no longer has any contact with the founders. However, Neteller's profits have been hit by a $9m legal bill after it was investigated by US authorities. Neteller settled with US attorneys by forfeiting $136m as part of a deferred-prosecution agreement. It also agreed to return an additional $94m held for US customers.
Mr Martin said that the US authorities had already seized $60m of the $136m and the rest would be paid out of cash generated by the business in two instalments. The company has no debt.
Mr Martin said Neteller had refocused its business in Europe and Asia. It will launch more financial products such as online debit and credit cards and target social networks such as Second Life. It expects to return to profit in 2008. There was no interim dividend. The shares closed up 1½ at 84p.
By Sophie Brodie
Last Updated: 2:04am BST 24/08/2007
Neteller, the online payments business for the gaming industry, has plunged into the red after being forced to close its US business.
The company has posted a first-half pre-tax loss of $24.7m (£12.3m), compared with $58m last year, after it stopped processing US payments in January. Revenues declined 57pc to $50.8m.
The US withdrawal followed a Federal government crackdown that led to several high-profile arrests in the online gambling industry. The previous October, President George Bush made it illegal for banks and credit-card companies to handle payments for gambling websites.
advertisement
Among those arrested were Neteller's Canadian founders Eric Lawrence and John David Lefebvre. They were charged with conspiracy in connection to the transfer of billions of dollars of internet gambling proceeds. After pleading guilty, they could face up to five years in prison.
Chief executive Ron Martin said yesterday the company no longer has any contact with the founders. However, Neteller's profits have been hit by a $9m legal bill after it was investigated by US authorities. Neteller settled with US attorneys by forfeiting $136m as part of a deferred-prosecution agreement. It also agreed to return an additional $94m held for US customers.
Mr Martin said that the US authorities had already seized $60m of the $136m and the rest would be paid out of cash generated by the business in two instalments. The company has no debt.
Mr Martin said Neteller had refocused its business in Europe and Asia. It will launch more financial products such as online debit and credit cards and target social networks such as Second Life. It expects to return to profit in 2008. There was no interim dividend. The shares closed up 1½ at 84p.
