Off Shore Gaming Association

We have gotten dozens of calls and emails regarding NeTeller. At this time, itis still business as usual for the payment processing giant.

However, here is the statment from NeTeller to its shareholders:

NETELLER Plc (LSE:NLR), a leading online money transfer service provider, notes
the recent action early on Saturday 30 September by US Congress to pass HR 4954,
the Safe Port Act (the “Act”) which includes certain provisions to prohibit
unlawful internet gambling through the restriction of payments to such sites.

The Act further states that there will be a period of up to 270 days beginning
on the date of the enactment for a board including the US Federal Reserve and
the US Attorney General to prescribe regulations requiring each designated
payment system and all participants therein to identify and block or otherwise
prevent or prohibit restricted transactions.

The Company, in conjunction with its advisers, is considering the potential
impact of the Act at this time. The Board believes that the Act may have a
material adverse effect on NETELLER’s US facing business. Once the Company has
more information about what the regulations will stipulate, it will have a
clearer view of which companies are affected, how those companies will be
expected to comply, and any possible resulting impact on the Company. In the
meantime, the Company will continue to monitor the progress of this legislation
and to energetically plan and adapt NETELLER’s business to minimise any
potential adverse impact. The Company will remain focused on developing its
business in line with its stated strategic objectives including geographical and
product diversification.

The Company’s next trading update for the third quarter will be issued towards
the end of October 2006. In the meantime, the Company will endeavour to keep
shareholders informed of any material developments.

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Sportsooks, Casinos and Poker Rooms in England are running from the US players since Friday night’s passage of the Internet Gambling Prohibition Act. The latest casualty is Bet365. Our phone lines have been ringing with questions about funds being returned. Players will have to contact Bet365 fo their refunds. Bet365 will not just be sending everyone their money back……Please be proactive and contact Bet365 today if you have an account with them.

However, Bowmans , the longest standing offshore sportsbook, has taken a different approach.

Bowmans wishes to reassure its clients!!

From their website: “Bowmans operates off shore outside the US and holds licenses to conduct online betting and gaming issued in the Isle of Man and Mauritius respectively. The proposed new law concerns payment processing from unlawful internet gaming. Bowmans does not regard itself as operating unlawfully in the US or anywhere else. Bowmans has its own payment processing service,which will continue to serve clients with the excellent service as before. We will continue to review the issues arising generally from the new law and will advise you as and when necessary.

Bowmans has taken legal advice from emminent US lawyers and is acting on this advice and there are no plans to close our payment process service nor do we plan to close our gaming web site”.

We are glad to see this development from such a storied outfit!

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Leading online gaming operators have announced their exits from the US market following the passing the Unlawful Internet Gambling Enforcement Act 2006 by the US Senate last Friday, September 29.

In a statement to the London Stock Exchange this morning, PartyGaming said: “If the President signs the Act into law, the company will suspend all real money gaming business with US residents, and such suspension will continue indefinitely.”

Casino and poker operator 888 said the Act represented “a significant development in the US legal status. In the light of these considerations the board has concluded that it is appropriate to suspend participation by US-based customers in activities covered by the legislation”. They added that the growth from its non-US revenues and would cover all refunds to US customers.

Sportingbet said that should its “non-US international banking partners to determine that the Act applied to them, then Sportingbet would no longer be able to take deposits from US residents.”

Payment processor Neteller said the Act may have “a material adverse effect on its US-facing business. Once the company has more information what the regulations will stipulate, it will have a clearer view which companies are affected, how those companies will be expected to comply.”

FireOne issued a statement saying the Act did not “define ‘unlawful internet gambling’ nor does it make unlawful any activities by financial institutions that are not themselves gambling businesses”.

Share prices across the sector have been hit dramatically and many leading gaming comapanies losing up to 60% of their value on the London Stock Exchange.

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