LIST OF TEN BANKS ENDING ONLINE GAMBLING WITH CREDIT CARDS

[clevfan]

TEN BANKS END ONLINE GAMBLING WITH CREDIT CARDS
Spitzer Hails Establishment of New Banking Industry Standard


New York Attorney General Eliot Spitzer announced today that ten banks have signed agreements to block cardholders from using their credit cards for transactions identified as online gambling.

"This is a turning point in the credit card industry," Spitzer said. "The vast majority of credit card issuers – and all issuers doing significant business with New York consumers – have now recognized their legal, ethical, and business obligation to block credit card transactions identified as online gambling."

Spitzer commended the ten banks, listed below, for ending a practice that "has enabled gamblers to wreak sudden financial devastation on themselves and their families. In this insidious form of gambling, no physical or financial barrier insulates the gambler from the potential for significant financial losses."

The initiative began in June of 2002 when the Attorney General obtained Citibank's agreement to block such transactions. The ten banks in this latest round of settlements cover a wide range of institutions. They include some of the country's largest financial institutions, with millions of cardholders across the nation, as well as smaller, regional banks. Some banks are state-chartered, while others are national banks. The ten are:

Cayuga Bank, based in Auburn, New York (now First Niagara Bank);
Chemung Canal Trust Company, based in Elmira, New York;
First Consumers National Bank, based in Beaverton, Oregon;
First Premier Bank, based in Sioux Falls, South Dakota;
Merrick Bank, based in South Jordan, Utah;
Peoples Bank, based in Bridgeport, Connecticut;
Trustco Bank, based in Schenectady, New York;
USAA Federal Savings Bank, based in San Antonio, Texas;
US Bank NA, based in Fargo, North Dakota; and
Wells Fargo Financial Bank, based in Des Moines, Iowa.
The credit card transactions are "coded" by merchants and their merchant banks to indicate to credit card issuing banks (the lenders) what is being purchased. By blocking certain of these codes, issuing banks can avoid extending credit for much gambling activity that occurs on the Internet.

The banks have agreed to block these transactions, and have agreed to pay a combined total of $335,000 in costs to New York State. The agreements apply to all lending activities either arising in New York or affecting New Yorkers. However, the effect of the settlements is expected to carry over to the banks' operations in other states as well, as the banks will likely join the majority of credit card issuers who already block these transactions across their entire systems.

The settlements also mark a trend in law enforcement to focus on intermediaries in combating illegal online activity. In New York, as in most states, promoting or facilitating unauthorized betting and gambling is illegal -- whether it occurs online or off. However, because Internet gambling businesses usually operate offshore in foreign locations, beyond the enforcement power of local authorities, they often avoid prosecution. Spitzer said it was therefore essential that financial entities, including banks, credit card associations, and other payment and processing services, do everything in their power to avoid facilitating these illegal transactions.

Spitzer said that since the Citibank settlement, many more credit card issuers have begun to implement blocking mechanisms against online gambling. He also noted that a number of large issuers -- including American Express, Providian, Bank of America, Fleet, Direct Merchants Bank, MBNA and Chase Manhattan -- had done so prior to that settlement, on their own initiative.

Spitzer also indicated that these settlements will send a message to banks doing business in New York that his office will pursue those that continue to extend credit for illegal online gambling.

"My office has worked with the industry to define an accepted standard of conduct in the banking world," Spitzer said. "Those who continue to extend credit to cardholders for online gambling transactions in violation of state law will be held accountable for their actions."

These cases were handled by Dan Feldman, Assistant Deputy Attorney General, and Ken Dreifach, the chief of the Internet Bureau.

[Mjulian]

Holy Shit.

Can the offshore industry possibly survive without the plentitude of deposits from the fine customers of Chemung Canal Trust Company?

[neilm]

LOL MJ, LOL.

I was thinking the same thing when I was reading the list. Banks? These are banks?

[buddyboy]

10 banks today decided that they should dictate to their customers how and where they should spend their money. Cowering to pressure from big brother, these banks decided on their own to prohibit their customers from gambling offshore. Comments from one bank executive sum up the decision, "well after this a-hole from New York extorted a quarter million from Paypal we were really left no choice. We made a ton of cash from online gaming and agreed to pay the state a little money so they wouldn't throw us in jail. Thank goodness that it's still ok for us to let our customers buy lottery tickets and bet on horses."

The state of New York allows its OTB operations to take bets from other states over phone lines, but for some reason that's not breaking the law. New York has no plans to force banks and credit card providers to attach the gaming code to New York's OTB operations.

[gobucky]

but they will process porn and let you purchase illegal prescription drugs !

[Conrad]

Merrick Bank, based in South Jordan, Utah
Well, not that many people in Utah would gamble anyway... [img]i/expressions/face-icon-small-wink.gif[/img]

[clevfan]

<< Merrick Bank, based in South Jordan, Utah >>




<< Well, not that many people in Utah would gamble anyway >>



This is misleading.....in the credit card industry, banks process cards from all over. The cities and states listed are where the home office locations are. But just because a bank is in Utah does not mean that they just cater to Utah residents.

[Conrad]

OK, my mistake. I used to be a Wells Fargo customer even though I was in WA.

[Dell Dude]

This post scared the shit out of me until I checked to see that Bank One wasn't on the list. If I am ever unable to make overdraft deposits with my debit card, I'll go to DC in my underwear and tell all those Senators and Congressman to go to hell![img]i/expressions/face-icon-small-mad.gif[/img][img]i/expressions/face-icon-small-mad.gif[/img][img]i/expressions/face-icon-small-mad.gif[/img]

Hey, that's how I won $2800 off a $5 deposit to INTERTOPS. If it worked once...[img]i/expressions/face-icon-small-tongue.gif[/img]

[bob sparks]

Credit Cards are a very big part of the offshore industry,with out them some of the books well close shop.