Sparks Fly During GIGSE Payment Pane

It didn't take long for sparks to fly at GIGSE 2005.

Towards the end of the conference's first day of seminars a panel was held to discuss the challenges facing the payment processing industry.

During remarks on the panel, Gord Herman with NETeller -- a leading online transaction payment provider for the I-gaming industry -- was asked about his thoughts if the U.S. government would ever accept regulation for the industry instead of prohibition.

In his response, Herman explained that there were various factors against the industry in its fight for regulation. Chief among them are the Christian coalition of politicians who are adamantly opposed to all forms of gambling and the fact that many land-based casino operators are against regulation because they fear the competition that could come from online operators.

Frank Catania, who was moderating the session, responded to Herman's remarks by saying that he, as a former regulator from New Jersey, felt that land-based gaming companies in the U.S. weren't opposed to the idea of regulation, they have just decided to leave it up to the regulators themselves.

Herman said that he had to respectfully disagree with Cantania and cited an advertisement that was done almost four years ago that depicted a "little old lady out in front of her house as all of her stuff was getting taken away because her son had lost it all gambling online," he said.

The ad, according to Herman, was paid for by the American Gaming Association (the leading lobbying group for the land-based gambling industry).

The AGA's chairman, Frank Fahrenkopf, was in the audience and questioned Herman's assertion that the AGA was behind the ad.

"I take issue with that," Fahrenkopf said from the back of the room. "If you are going to get up on a panel at least know what you are talking about. I challenge what you are saying."

Caught of guard, Herman didn't back down.

"Well I know for a fact that the AGA was behind the ad," he said.

"If you want to challenge this, we can spend some money on it and see," Fahrenkopf responded.

"It may not have been the AGA directly, but I know one of your members was behind it," Herman responded.

Catania then mediated and got the discussion back on track, but the tension was still in the air as the panel discussion continued.

The session also included a lengthy discussion from both the audience and the panelists about possible steps the payment transaction industry could take to combat a perception in the U.S. that online gambling is used to laundry money.

Everyone on the panel agreed that there are fraudulent payment transaction providers out there on the Internet who are in place mainly to launder money for organized crime and other criminal elements, but most legitimate companies dealing with the I-Gaming space are on the up and up.

"The first thing you need to laundry money is a system that accepts cash," Herman said. "We don't accept cash and never will. Those systems that do accept cash probably aren't legitimate operations."

Increased "know your customer" policies that have been adopted by payment transaction providers and the operators themselves have also helped in preventing money laundering from being used at online gambling sites, the panelists agreed.