The Canadian-based Optimal Group Inc. recently brokered a non-prosecution agreement with the United States Department of Justice to forfeit $19.2 million in funds. The case was tied to Optimal’s involvement as an e-wallet provider to process billions of dollars related to online gambling operations.
US government pursuing online gambling operations
The United States has been actively seeking out any e-wallet providers that have been involved with any online gambling sites. The US has used a variety of laws to make their case. Among these laws are the Wire Act, the Unlawful Internet Gambling Enforcement Act and the Illegal Gambling Business Act.
From 2004 to 2006, Optimal’s e-wallet company Firepay was operating in the United States. “Optimal, operating an electronic wallet called Firepay, processed more than $2 billion worth of illegal gambling transactions for United States customers,” the U.S. Attorney’s office said. When the United States enacted their Unlawful Internet Gambling Enforcement Act in October of 2006, Optimal no longer accepted payments from customers within the US. Prior to the legislation, about 80% of their payments were from customers in the United States.
Under the deal, Firepay acknowledged a violation of federal law by providing wagering in the United States. The Optimal Group agreed to forfeit $19,182,418 as part of their non-prosecution arrangement with the US. Optimal stated that the amount was a “disgorgement of property involved in and proceeds received from the payment processing services that were provided by the company’s subsidiaries to Internet gambling merchants in relation to U.S. customers of such merchants.”
Firepay is no longer in operation. The Optimal Group has focused their business interests into some different areas. The Group’s WowWee business is a leading designer, developer, marketer and distributor of innovative hi-tech consumer robotic and entertainment products. The operation is also involved in the development of toys.
click here to see most Popular PagesElectracash also a target
The US is also looking into the operations of many other foreign and domestic e-wallet providers. The California based online cash processor Electracash Inc. has been a target of the government in recent months. In July, US federal authorities seized bank accounts of the company. The accounts were allegedly used to process payments from online gambling operators. Now, the government is seeking to gain access of Electracash e-mails to find further evidence of illegal activity.
UIGEA related seizures could be winding down
While the government has been able to seize some funds from several e-wallet providers tied to the Unlawful Internet Gambling Enforcement Act, the seizures could soon be a thing of the past. With Massachusetts congressman Barney Frank’s reform legislation to end the UIGEA gaining momentum, the government could focus on taxing online gambling operators instead of the far more difficult process of trying to enforce laws that are vague in nature. The current policies of the United States have done nothing to stop the continued growth of the online gambling industry. The impending UIGEA reforms would enable federal authorities to direct their energies towards more substantive issues and concerns.
