NETeller Third Quarter Revenues Up 50%

Published: Tuesday, October 31, 2006 Online-Casinos.com

NETELLER THIRD QUARTER REVENUES UP 50 PERCENT

But a major portion is from the US, and the company is watching developments

The Isle of Man registered online money transfer company Neteller reported excellent third quarter results this week, but warned that the legal situation in the United States, which it is watching closely, could "...fundamentally change the future direction and nature of our business."

Neteller revenues increased by almost 50 percent to $67 million (GBP 35.25 million) as the company said that it would continue to accept US business until the new regulations governing American money transfers to online gambling sites were drawn up, a window of 270 days for this purpose having been allowed by US legislators. Profits came in at $32.5 million, up from $26.3 million. Revenue for the full year to date is $185.6 million, up 57 percent from $118.4 million during the same period last year.

The company had signed up over 3 000 new members in the quarter, bringing total membership to over 3 million clients.

However, two-thirds of the new customers were from the US, where Congress has introduced legislation cracking down on online gambling financial transactions under the Unlawful Internet Gambling Enforcement Act passed earlier this month. The new legislation in the US, which specifically targets banks and payment services which facilitate online gambling, sent Neteller's shares falling 60 percent after it was passed despite the company's offshore status that theoretically places it beyond the reach of US law.

With the UIGEA clearly in mind, the company statement said: "While October has shown strong sign-ups, revenue and cash generation, it is difficult to predict trends or outcome for the remainder of the year."

Most UK-listed companies that operate online gambling sites stopped taking bets from customers in the US as soon as the UIGEA became law, but the company has remained operational for the US player, saying it would wait until the regulations are drawn up and it becomes clearer what the legislation will mean for its business.

Neteller said the legislation was "likely to fundamentally change the future direction and nature of our business".

Its president and chief executive officer, Ron Martin, said: "Neteller is constantly re-examining its position with regard to the US market and its provision of services to that market is currently under review."