Here are some excerpts from an article that orginally appeared in The Register. If this doesn't make you feel all warm and mushy inside I don't know what will.

On Friday, the Federal Government issued subpoenas to major European banks, including Credit Suisse and HSBC, demanding copies of all business records, correspondence, and emails related to internet gambling transactions.

The subpoenas are the latest extraterritorial assault by the American government on foreign institutions involved with online gaming. Earlier in the week, two former executives of NETeller, a British payment processing service, were arrested on money laundering charges in connection with NETeller's online gaming financial transactions, although neither was currently involved with the company in any managerial capacity.

The fact that neither of them were currently involved with NETeller deepened the paranoia among those involved in the online gaming industry, even among those whose companies are no longer soliciting business in the American market, as the arrests concerned transactions dating back to 2005 when the status of American law on online gaming was still in question.

We know where you live...

It raises the possibility of widespread American criminal charges against anyone who has ever been involved with the online gaming industry, even if in a peripheral way.

After all, banks such as Credit Suisse that underwrote initial public offerings for online gambling companies are not necesarily those that have been processing retail transactions for the online gambling industry. This means companies previously considered safe from American bullying must now see themselves at risk - regardless of where they are headquartered.

It gets worse. Since indictments may remain sealed under American law, anyone in a decision-making capacity with any investment bank that has involved itself with what the Department of Justice (DoJ) described last week as a "massive criminal enterprise" should be particularly careful about travelling in any American jurisdiction, including places such as the American Virgin Islands or American Samoa that are involved with offshore banking.

Stephen Lawrence, a Canadian citizen and former CEO of NETeller (who has held no managerial position whatsoever for over a year), got snapped up by American authorities last week in the American Virgin Islands. The FBI grabbed the other former exeuctive, the guitar strumming lawyer turned philanthropist John Lefevbre, at his home in Malibu, California.

Apparently, the former NETeller execs had been the target of an FBI probe since June 2006, which means the money laundering allegations thrown at them pre-date the passage of the Unlawful Internet Gambling Enforcement Act (UIGEA).

Maybe the former executives were only the low hanging fruit due to their proximity to American justice, but one shudders to think what the American government intends to do once the 270 day waiting period ends before the UIGEA takes effect.

Although the arrests of the former NETeller executives shocked the gaming industry, the almost unlimited scope of the American subpoenas proved even more jaw dropping. After the arrests, NETeller almost immediately ceased accepting payments from American citizens, providing a link on its website offering instructions on how to withdraw whatever funds currently resided in those accounts.

A Canadian rival, ESI Entertainment's Citadel processing system, also ceased collecting payments from Americans in the aftermath of the arrests. However, NETeller PLC was not formally charged with anything, leading many to wonder when the other show would drop. Drop it did, but nobody expected anything of this magnitude.

According to public filings cited by the United States Attorney's office in a statement following the arrest, in the first half of 2006, NETeller derived approximately 95 per cent of its revenue from online gambling sites, 85 per cent of which came from North America and 75 per cent from the United States. NETeller pulled in over $5bn in revenue in the first half of 2006. The government also cited information in the filings that NETeller knew its transactions could be "illegal under current or future US law", (emphasis mine) in an attempt to satisfy the "intent" element of American money laundering charges.

The UIGEA board terror

NETeller proved to be a major thorn in the side of American authorities obsessed with staunching the flow of American dollars to overseas online gambling sites, and was frequently cited by critics of the UIGEA as an easy workaround in the wake of the passage of the UIGEA. No more. Unfortunately, as always, darker elements will move in to fill the gap, those that can pull up stakes at a moment's notice.

Although the legality of certain forms of online gaming was hotly debated in American legal circles, even in the aftermath of the UIGEA - only wire transactions involving sporting events have been explicitly prohibited since 1961 - the DOJ has seen fit to prosecute those who had previously operated in a kind of legal limbo. Anyone with any doubts about their involvement in this controversial business would be wise to stay away from the United States and its possessions for a long time to come.

Offering a flicker of hope to the online poker community, whose television popularity belies the illegality of its online presence, the gaming trade publication Gambling911.com reported last week that the National Council of Legislators from Gaming State, at a conference in the Florida Keys, responded favourably to comments by the head of the Poker Player's Alliance, Michael Bolcerek, regarding the benefits of legalised online poker.

What influence state legislators will have over federal policy is unclear, and he might well have been preaching to the converted, but legalisation of truly intrastate (rather than interstate, which would fall under federal law) online gaming could at least provide evidence that the online gambling industry can be tamed and controlled, not to mention taxed.

According to Igamingnews.com, Juniper research released a revised report last week estimating that the mobile gaming market will expand from $1.35bn per annum this year to $16.6bn in 2011. The downwardly revised forecast accounts for the American Justice Department's ongoing legal crusade against the online gaming industry, in which any transactions that touch the American market are fair game for prosecution. Caveat emptor.