Citigroup has bowed to pressure from US lawmakers and agreed to block online gambling transactions that use its credit cards.
Citi's gambling crackdown was announced by New York Attorney General Eliot Spitzer.
“Americans now waste $4 billion a year on this pernicious form of gambling,” Spitzer says. “With this agreement, we will cut off an unlimited line of credit that was a jackpot for illegal offshore casinos.”
Under the agreement, Citibank will no longer process transactions with online casinos and other Internet gambling operations. Citi, the largest credit card issuer in the US, joins other companies, including Bank of America, MBNA and Chase Manhattan Bank, which had already imposed imposed blocks on gambling transactions.
Noting the difficulties in prosecuting offshore online casinos operating in violation of New York and US law, Spitzer says it is essential that financial entities, including banks, credit card associations, and other payment and processing services, do everything in their power to block such transactions. Several bills currently pending in the US Congress would place new restrictions and criminal penalties on financial entities that facilitate such transactions.
Citi's agreement to debar online gambling follows an investigation by the attorney general's office. The bank has also agreed to pay $400,000 to groups that combat compulsive gambling and aid those affected by it, and to pay an additional $100,000 to the State of New York.