BAD NEWS FROM BRITAIN

(687) (12-October-2006)

Two major banks about to bow to US anti-online gambling law?

Reuters reported Thursday that two major British banks with strong American ties, Barclays and Royal Bank of Scotland will shortly advise corporate customers to avoid taking Internet bets from the United States,  according to banking and gambling sources.

"The two banks will be telling corporate clients they're not prepared to do business with companies that take online bets from the United States," said the unnamed source. "Then they'll look at ways of stopping retail customers from online gambling."

An RBS spokeswoman said: "The Royal Bank of Scotland Group will take the necessary steps to ensure that we are fully compliant with this [U.S.] legislation." Barclays declined to comment.

Gambling companies were left in shock last week after the U.S. Congress unexpectedly passed a bill making it illegal to accept wagers over the Internet, or for banks or credit card companies to process payments to online gaming firms.

The measure has been passed to President George W. Bush to sign into law, which the industry expects to happen on Friday.

Banking and gambling sources said the two banks had written to corporate customers asking them to confirm they are complying with U.S. gaming legislation.

Online money transfer firm Neteller says it is reviewing the situation.