Withdrawing to an eWallet can cause funds to sit in 'limbo'
A few Canadian gamblers have emailed me with complaints about an issue that is currently occurring with the payment processing company Instadebit and the UK gambling company William Hill. According to the gamblers, they requested withdrawals from William Hill by Instadebit in late October and early November and the money has not yet reached their accounts. Both William Hill and Instadebit admit that a technical glitch has caused the issue, but both sides are passing the buck, leaving bettors caught in the middle.
The following was an email sent to a gambler from William Hill on Friday November 10th. The withdrawal was released by William Hill on October 26th.
"Your payment has already been processed and approved on our end. Once the withdrawal has been processed from our end, it should reach your account within 3 to 5 working days. However, we did receive reports of a technical error with Instadebit. According to our third-party payments processor, their systems are not accurately reflecting which Instadebit payments have been successfully processed or rejected due to a system communication issue at present. But they are now working to fix it, so I'm sure it'll be resolved soon. I'll also have this forwarded to our Payments Team for further checking. We apologise for the inconvenience this may have caused you. Rest assured that this is being looked into and are being investigated with a view to getting them fixed at the soonest time possible. You will be notified upon update on this. We ask for your patience with regard to this matter."
The customer also emailed Instadebit Security which responded as follows:
"The merchant is aware of the problem and it has been rectified, however, you will have to follow up with the merchant – advising them of the missing transaction numbers and amounts for them to resend to INSTADEBIT as we cannot do that for them."
The customer said he forwarded Instadebit's reply to William Hill, who once again said that the funds have left their site so it's up to Instadebit to process it. And when followed up with Instadebit they once again told the customer that they can't access the money, so William Hill needs to submit it again.
Needless to say, this back and forth, which all customers are getting, is leaving them frustrated. Both Instadebit and William Hill were only too happy to process deposits for the customers, in exchange for a transaction fee, but the technical glitch has left the withdrawals in some sort of Internet twilight zone. William Hill is insistent that the money already left their bank, so they have done their part and Instadebit is saying that they can't get to the money and won't process a withdrawal for money they don't have. I contacted someone at William Hill support for one of the bettors and asked them if the money could be simply put back in their betting account, but I was told it couldn't. The customer service person told me that usually when money is sent directly to a bank account or to an eWallet (which still goes through a bank), it must be resolved within 3 weeks. At that point the bank is obligated to either accept it reject it, and, if the latter happens, the funds are redeposited in the bettor's account.
But this is a unique situation. The money is not sitting in a bank, but rather in some sort of holding account that nobody can access. One customer who posted on Twitter said he was yelling at support for a $1,700 withdrawal for over 2 weeks and finally got the money back once he was able to prove the withdrawal was made and is pending. But his is an unusual situation. Everyone else who emailed me on the matter said their money is still frozen and right now they are just getting the runaround from all concerned parties.
One gambler who emailed me, Edward, who moved to Canada from the United States in 2012, said that this situation has brought back bad memories for him. Edward was a customer of NETELLER in the 2000s and he had his money frozen for several months and all cries for help to get his funds fell on deaf ears. As many will recall, in January 2007, four months after passing of the UIGEA, NETELLER founders Stephen Lawrence and John Lefebvre were arrested by the FBI on charges of money laundering. Upon that announcement Americans tried to withdraw over $50 million from the payment processor but the Department of Justice (DoJ) seized all money in transit that was destined to American banks and almost immediately after those seizures, NETeller suspended all accounts of American customers forbidding any payments to or from gambling websites.
While Edward didn't withdraw any money from NETELLER, he had close to $2,000 in his NETELLER account. He figured he would get around the suspension by sending a p2p transfer to his cousin who lives in Edmonton, Alberta, but NETELLER quickly closed that avenue as well after thousands of other American customers did the same thing in the previous day. According to one source, over $25 million was sent by p2p transfers to friends and relatives in other countries (mostly to Canada) in the 24-hour period following the announcement of the account suspensions. Both NETELLER and the DoJ quickly noticed what was happening and NETeller froze all activities from U.S. accounts on behalf of the DoJ. This meant that they could not use their accounts at all. Edward said that like with Instadebit, when he complained to NETELLER, they told him the issue was now in the hands of the DoJ and to "be patient". In the meantime, NETELLER 'continued to process gambling transactions for the rest of the world, acting as if it was business as usual. And ironically NETELLER today is one of the preferred payment processors for legal gambling sites in New Jersey.
While the current situation and the NETELLER fiasco were two obvious examples of payment processing failures, they are not the only ones. In 2008 the state of Maryland and the IRS seized almost $24 million of funds from payment processors working for Bodog and in 2011, prior to Black Friday, a payment processing company called PMI took off with player funds from Full Tilt Poker. To the credit of both Full Tilt (until Black Friday) and Bodog, they still processed withdrawals for their customers by other methods following the seizures. There have been other times when player's funds were left in limbo after payment processing snafus involving eWallets, but none were as large or as public as the ones mentioned.
Not surprisingly, these types of payment issues are precisely why both players and gambling sites are finding favor with virtual currencies like Bitcoin and Ethereum. With crypto currencies there are no banks involved, and transactions are instantaneous and can not be reversed. Unlike with Instadebit or NETELLER 'money never goes into a holding account pending acceptance by a bank and it is completely out of site of the DoJ, so they cannot seize any of the funds. As one site told me:
"Funds are deposited in the players accounts as soon as we get a confirmation. For bitcoin, the typical time is in minutes. It simply requires 2 people to acknowledge the transaction on the blockchain which is never an issue." The site owner also mentioned that while he had chargebacks on credit and debit cards, he has never had that worry with Bitcoin.
As of Sunday, November 12th, not one person who contacted me had received any of their funds from William Hill and the person with the earliest funds outstanding said their funds were released by William Hill on October 26th. November 15th will be exactly three weeks from that date, when the customer service rep at William Hill informed me that transactions must be accepted or declined, and if they are declined, they will be put back in the player's account. I'll contact that person again at that time to see if William Hill is true to their word or if the funds remain in Internet no man's land.
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