Attracting wide New Zealand media comment over the weekend was the news that the New Zealand Green political party wants a new online gambling site shut down because it "threatens the viability of the racing industry."

Green Party member of parliament Sue Bradford is at the heart of the row, claiming that an online gambling site, Race-O New Zealand, 'might' be illegal because the Gambling Act passed three years ago outlawed online gambling within New Zealand.

It also made betting on horses illegal unless bets were laid with the TAB, she said.

"Such online activities are illegal not only for the operators but for the participants," said Bradford. "Perhaps to circumvent these legal restrictions, Race-O is the trading name of a company registered in Costa Rica, while its gaming and betting license has been secured within the Kahnawake Indian nation near Montreal, Canada.

"The Government should immediately close down the site, and pursue prosecutions vigorously if laws have been broken."

The betting site, whose original investors included leading breeder Sir Patrick Hogan and former top trainer Dave O'Sullivan, is being investigated by the New Zealand Department of Internal Affairs.

Berri Schroder, a part-owner of Melbourne Cup winner Brew, is a Race-O (NZ) director.

Race-O is registered in Costa Rica in central America and its betting license has been secured from the autonomous Indian territory of Kahnawake in Canada.

Bradford said sites like Race-O New Zealand could threaten the racing industry because the TAB monopoly guaranteed that gambling profits were returned to the industry "in a reasonably accountable manner".

"Racing seems already to be in such a state of decline that it is reduced, shamefully, to taking the proceeds of pokie money to bulk out major stakes," she said.

"It would be a pity if the advent of online gambling sites like Race-O should even further undermine the distribution system maintained by the TAB through the auspices of the Racing Board."

It is illegal to set up an internet betting website in New Zealand, and the website has angered the Problem Gambling Foundation, which told the Sunday Star-Times it was a deliberate attempt to get around the ban.

The betting company offered a $1 million prize pool for those who selected the winners of eight races at Matamata on Saturday.

An attempt was made to launch Race-O nearly 13 years ago but was rejected by New Zealand racing officials on the grounds that it was basically little more than an extension of pick6 betting (selecting the winners of six races).

Race-O has no association with the New Zealand TAB. Undeterred, Race-O has said it would continue to offer a $1 million prize pool on future events.

Another payment option closes its doors to online gambling. Canadian online gamblers who use the FirePay e-wallet will be scrambling to mobilise their funds following a surprise notification from the company just before the weekend.

The online payments processor has now extended its ban on US online gambling transactions to Canadian consumers, according to an on-site notice this week.

The notice reads:

Effective February 21, 2007, FirePay www.firepay.com will no longer allow Canadian consumer payments to online gambling merchants.

Effective February 28, 2007, FirePay www.firepay.com will no longer allow Canadian consumers to receive payments from online gambling merchants.

Unlike their US counterparts, who are having serious difficulties in retrieving monies from e-wallets as a result of US Department of Justice activities, Canadian Firepay account holders will at least have time and alternative channels to withdraw their account balances. The notice includes guidance on non-gambling exit options.

All Canadian FirePay account holders will continue to be able to make purchases and receive payments from non-gambling online merchants, as well as to "Deposit From" and "Withdraw To" their Canadian bank account.

Click here for a listing of non-gambling merchants that accept FirePay: http://www.firepay.com/_stores/default.asp

For any questions regarding these deadlines or this policy, please email info@firepay.com.

Although online poker sites like Poker Stars ceased accepting US player deposits from FirePay last October 13, these sites will now find Canadian players lost to them from the FirePay route as well. FirePay is a subsidiary of Optimal Group Inc., a NASDAQ-listed company with over $6.5 billion in worldwide processing annually.

Gambling software producer CryptoLogic Inc. said yesterday its fourth-quarter profit dropped 70.6 per cent to $1.7 million (U.S.) in its first financial performance report since the U.S. government declared a ban on online gambling.

For the ended Dec. 31, the company's earnings were equivalent to 12 cents per diluted share, down from $5.8 million, or 43 cents per share, in the same period last year.