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Gambling Payment Processor Pleads Guilty In US Court

Posted on May 16th, 2010

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In 2009, the US Department of Justice (DOJ) had begun wholesale crack downs on different players in the online gambling industry. Payment processors had taken the brunt of this legal assault, and one Canadian citizen had been indicted to await trial in the United States for his hand in the gambling transactions through his companies.

Douglas Rennick, a Vancouver resident, was charged with bank fraud, money laundering, and illegal gambling charges when the hammer had fallen last summer. A guilty plea was entered on Tuesday, which prompted prosecutors to drop most of the charges they had placed against Rennick for his involvement in the currently unregulated industry of online gambling.

Rennick’s charges had been brought against him due to the opening of bank accounts in the United States which were used to effectuate the transference of cash from USA online gambling companies outside of the United States. Under current U.S. federal law, it is illegal for payment processors to enact these transactions.
Under the terms of his guilty plea, which stated that he had illegally processed payments for online poker rooms, he will be forced to forfeit $17 million dollars and potentially face two years imprisonment.

The Department of Justice’s scare tactics have been successful in forcing some gambling operators and payment processors out of the United States market, as seen with PartyGaming, Microgaming, Playtech, and a wide assortment of payment processors. Using the Unlawful Internet Gambling Enforcement Act and the Wire Act, the Department of Justice has essentially brought a crusade upon online gambling.

The UIGEA has not yet been brought into effect, but the deadline is set for June 1st – a deadline that is right around the corner. Though legislators are currently working to repeal the UIGEA, optimism for a pre-deadline repeal is waning.