RBS shuts down startup accounts (Smarkets and others)

Re:RBS shuts down startup accounts (Smarkets and others) by DrJokepu on Monday February 06, 2012 @09:55AM (#3557585)

It seems to me that RBS was very clear about the issue, they simply don't want to deal with gambling. It's a valid debate whether this is a reasonable or acceptable thing to do but it's massively misleading to conclude that this has anything to do with the company being a startup.

Personally, I think it should be obvious to everyone that gambling is a rather low profile business and anyone who decides to do business in such an area should be prepared for obstacles like this; I don't see how running to the press would help at all when the public opinion about your industry is not exactly very high.

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Re:RBS shuts down startup accounts (Smarkets and others) by intranation on Monday February 06, 2012 @10:06AM (#3557616)

Disclaimer: I'm a Smarkets employee.

Well it's not entirely clear that it's just related to gambling - Betfair, the UK's largest betting exchange, do all their merchant transactions (customer deposits and withdrawals) through RBS as well - given they're directly linked to credit cards the risk of chargebacks etc. is clearly higher than a day-to-day business account that is mostly used to pay employee salaries (as presented in the article, Smarkets client funds are ring-fenced in a Maltese bank). The obvious difference to me is that Betfair is a multi-million pound company and Smarkets isn't.

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Re:RBS shuts down startup accounts (Smarkets and others) by saurik on Monday February 06, 2012 @11:40AM (#3558001)

Just because that's the "obvious" difference doesn't mean it is the correct one; in fact, it doesn't even mean there /is/ a difference. I am constantly involved in situations where people online are claiming something I know a lot of internal details about (whether it be my own company or some larger outfit where I happen to know people) "is unfair because Y does the same thing we do and isn't getting flak" when in fact Y actually is getting flak (but isn't complaining about it in public) or is really not doing quite the same thing.

Honestly, this is sufficiently and irritatingly common that unless you've talked to the people at Betfair and gotten them to agree with your story, I not only am going to have a hard time believing your take, I'm going to have a hard time not negatively judging your company for telling it like that. :(

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Re:RBS shuts down startup accounts (Smarkets and others) by intranation on Monday February 06, 2012 @11:57AM (#3558089)

I was specifically addressing the notion that gambling is risky or "low profile" (which I assume to be a synonym for shady) with regards to the "appetite for risk" reason stated by RBS in their letter.

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Re:RBS shuts down startup accounts (Smarkets and others) by ocirion on Monday February 06, 2012 @10:06AM (#3557614)

I imagine you are talking from a US perspective. I don't believe there is a negative perception of gambling startups in the UK / Europe, especially if you consider success stories such as Betfair.

What makes gambling low profile ? Its a business, that has a unique model that turns a good profit. Why should it be treated differently from any other startup?

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Re:RBS shuts down startup accounts (Smarkets and others) by wladimir on Monday February 06, 2012 @10:14AM (#3557645)

Why should it be treated differently from any other startup?

A lot of people have the opinion that gambling does not produce "value", and that it makes people addicted to it, while running them into the ground financially.

I'm not sure about the rest of Europe, but here in The Netherlands it's not even allowed to start a gambling site, as the state has an absolute monopoly on it (Holland Casinos).

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Re:RBS shuts down startup accounts (Smarkets and others) by ocirion on Monday February 06, 2012 @10:24AM (#3557675)

That would be like banning liquor stores or corner shops selling cigarettes. The monopoly is because the government wants a piece of it. The potential of gambling sites to make huge amounts of money is why the government takes any interest. They will restrict them and/or tax them to fill their own coffers.

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Re:RBS shuts down startup accounts (Smarkets and others) by Leynos on Monday February 06, 2012 @10:32AM (#3557699)

As a parallel example, there are states in America where the only off-licences (liquor stores) permitted to operate are the state run monopoly.

My understanding of the reasoning behind this is centred around morality, although I imagine there's also a financial incentive for the state to maintain this control.

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Re:RBS shuts down startup accounts (Smarkets and others) by jeltz on Monday February 06, 2012 @12:37PM (#3558293)

This is quite obvious in Europe. This financial crisis has spawned a surge in interest in stronger government regulation of gambling throughout Europe. A couple of years ago there was little to no interest.

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Re:RBS shuts down startup accounts (Smarkets and others) by wladimir on Monday February 06, 2012 @10:43AM (#3557744)

We also have high tax rates on booze and cigarettes, for similar reasons, officially to discourage over-use and finance the cost to society (healthcare etc...).

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Re:RBS shuts down startup accounts (Smarkets and others) by kamjam on Monday February 06, 2012 @12:32PM (#3558269)

"A lot of people have the opinion that banking does not produce "value", and that it is addicted to government money, while running them into the ground financially."

There, I've correct that for you :)

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Re:RBS shuts down startup accounts (Smarkets and others) by driverdan on Monday February 06, 2012 @10:50AM (#3557776)

It doesn't matter who their target customer is, gambling sites are higher risk than traditional ecommerce sites. They have higher chargeback rates and the industry has a lot of bad actors. Is it shortsighted to blindly drop a startup just because it's gambling? Perhaps, but if you just go on industry averages there is higher risk there.

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Re:RBS shuts down startup accounts (Smarkets and others) by DrJokepu on Monday February 06, 2012 @10:53AM (#3557784)

For the record, I'm in the UK. Personally, I don't think there's anything wrong with gambling in moderation, it's a lot of fun after all, however, I'd be very surprised if the public opinion about the gambling industry wasn't within the league of those of the tobacco and arms industries.

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