NETeller reports FY 2007 loss

Gotta Get that Paper, Dog

On Tuesday, NETeller released its fiscal year report for 2007 showing that the company had suffered a $185.7 million pretax loss.

The biggest impact on NETeller's bottom line for the year was the $136 million it paid the U.S. government to settle charges of handling billions of dollars of illegal online gambling proceeds. The company also spent $37 million in restructuring costs as it shifted its business away from the United States.

NETeller's founders John Lefebvre and Stephen Lawrence were arrested in January 2007 for their hand in creating NETeller and allowing the company to process online gambling transactions from U.S. customers. At the time of their apprehension they were no longer involved with the company.

The company was facing charges as well but chose to make a deal with prosecutors that would have the company pay the $136 million fine, cooperate with the investigation against Lefebvre and Lawrence, and discontinue allowing U.S. customers to transfer money through their e-wallet service to online gambling operators.

In 2006, NETeller had recorded a $107.38 million profit. In 2007, the company's revenue rose 15%, but couldn't make up for the legal and restructuring costs.

Since its legal trouble in the United States, NETeller has been focusing on other markets, setting up services for customers in Australia and Asia.

According to the company's report, trading during the first two months of 2008 showed continued growth from 2007. Plus NETeller joined with Centricom Europe to distribute the POLi online bank payment platform in Europe.

They also launched the POLi service through NETBANX in the United Kingdom.

"2007 represented a milestone for the Group as we successfully resolved our issues with the U.S. authorities, and energetically refocused the business to put into action our updated vision and mission," said Ron Martin, NETeller president and CEO. "The renewal of the Group's businesses to leverage changed market opportunities has created energy and enthusiasm throughout the organisation."

Martin also said he is confident the changes will reflect in the company's performance in 2008.

"I would like to thank all our employees for their contributions during a very challenging period in 2007, and I look forward to greater progress into 2008 and beyond."

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