At least four Wall Street investment banks were issued subpoenas by the United States' Department of Justice as part of an ongoing investigation of the online gambling industry.
The banks that are said to be under investigation include Deutsche Bank, HSBC, Dresdner Kleinwort and Credit Suisse. The firms that received the subpoenas apparently had underwritten the initial public offerings of some of the biggest online gambling sites that operate overseas.
Since the prosecutors cannot go directly after the casinos, they instead aim to prosecute the operations' American partners, marketing arms and, possibly now, investors. The justice department had ordered the banks to hand over all e-mails, telephone records and documents connected with internet gaming companies.
This comes in midst of a crackdown on online gambling by the U.S. government in which two of Neteller's founders were arrested last week.
Canadians Stephen Lawrence and John Lefebvre are charged with transferring billions of dollars in illegal gambling proceeds. Both of them face a maximum sentence of 20 years in prison.
The question that prosecutors are facing is whether the American financial companies are within their rights to invest in the overseas online casinos, since those operations are legal and licensed in other jurisdictions, such as the UK and Gibraltar.
Shares in the world’s biggest online gaming companies plummeted as a result. PartyGaming fell 9.8 percent, while rival Sportingbet went down 3.4 percent and 888 3.5 percent.
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