FirePay Settles with NY District Attorney for $19.2 Million

November 13, 2009 | News Category: Gaming Law

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FirePay used to be a well-used and popular e-wallet solution used by online casino players in the United States. FirePay is owned by a Canadian company, Optimal Group Inc.

Technically, the UIGEA (Unlawful Internet Gambling Enforcement Act) only requires compliance from December 1st, 2009. However, US legal authorities have been moving ahead with cases against a number of companies connected to the online gambling industry, including those that have ceased operations in the US when the UIGEA was passed into law.

It has been reported that FirePay has paid out $19.2 million to the New York District Attorney, as part of a settlement against charges that were made against them. FirePay's story sounds similar to those of other companies, such as Neteller.

After the enactment of the UIGEA in 2006, FirePay pulled out of the Internet gambling market in the United States. In 2007, despite the fact that FirePay had already left the US online gambling market, the state of New York began to go after FirePay for wagers that were placed by NY state citizens via their e-wallet service.

The disturbing part of FirePay's story is that the company was being prosecuted for transactions that were made between 2004 and 2006, before the UIGEA was enacted. The sum of $19.2 million was already in possession of the NY District Attorney, since this is the amount of money that was seized at the time. FirePay agreed to forfeit the millions of dollars as part of their settlement with the NY District Attorney, which has also cleared their name of any possible criminal infringements in the United States.

This may be good news for FirePay, but it is not good news for a number of online gambling operators, who now run the risk of being prosecuted as a result of the settlement. As part of the settlement, FirePay agreed to attest that the Internet gambling operators who had used its services during that time period, were aware that they were taking part in illegal gambling activities. It is, therefore, highly likely that more funds could be seized, and a number of new prosecutions could take place. At this time, the online gambling operations are not being targeted for any current infringements, but for transactions that were carried out before October, 2006 - before the enactment of the UIGEA.

While nothing can be done to change the past, one can hope that the online gambling bills, and anti-UIGEA legislation, that is waiting in the wings, will become law soon, and that online gambling operators will be free from the fear of more prosecutions.