Thursday, January 25, 2007

In their relentless pursuit of anybody and anything that was responsible for
spreading online gambling in the United States, the US Department of Justice
is reported to have issued subpoenas to a number of high profile UK
investment banks. The Financial Times reports that the subpoenas were issued
from October (after the passing of the Unlawful Internet Gambling
Enforcement Act of 2006) by a New York Grand Jury at the request of Michael
Garcia, the US Attorney who was recently at the forefront of the arrests of
the founders and former directors of Neteller plc last week. The FT report
says that the subpoenas are likely to have requested copies of emails,
telephone and banking records going back to 2001 and are concerned with an
investigation of specific gambling companies such as Party Gaming plc and
888 Holdings plc. Companies publicly identified as having received subpoenas
include HSBC, Dresdner Kleinwort, Deutsche Bank and Credit Suisse. The
report refers to "sources familiar with the probe" who say that these
companies have not been told they are targets and that other advisers to
online gaming floats, including accountants and lawyers, could also be the
subject of subpoenas. The FT report quotes a Columbia University Law
Professor, John Coffee, as saying that sending a company a subpoena
".doesn't automatically mean that they're automatically going to indict a
corporation. They are often gathering information against other people who
will be charged later." The ongoing actions of the US authorities against
online gambling have been controversial since they often target non-US
companies who are conducting business perfectly legally under the laws by
which they are governed in their own countries, but it is clear the US has
taken badly to the amount of money that has left its shores through the
gambling activities of its citizens; that much was made crystal clear by the
Neteller charges that were made public last week. The Sunday Times also
quotes sources in the City of London, one of which is quoted as saying:
"To say the situation is sensitive is the understatement of the decade. The
problem is, even if you know you have done nothing wrong, you have no powers
of resistance. You can quickly go from being a bystander to a target, so
even if you are bomb-proof, you have to assume you are subject to hostility.
The Department of Justice has taken a shotgun, not a rifle approach, in
relation to lots of gaming companies and has just asked everyone to hand
over all the information they have."