Credit Cards and Online Gambling

For online bingo and poker players finding a convenient acceptable option has been difficult thanks to ill advised federal laws on internet gambling. What is happening in the online poker industry could have an effect on online bingo players in the near future. Currently only three states have legalized online gambling but about a dozen are expected to legalize the practice next year. In states where online gambling is legal deposit options include credit/debit cards, echeck, bank wire and check by mail. In the poker industry deposit options offered by Ultimate Poker and WSOP include credit/debit cards, echeck, bank wire and check by mail.

Despite the legality some players have encountered problems while attempting to make deposits. A majority of complaints have been about Visa cards. There were so many complaints about Visa that at Ultimate Poker Visa is no longer a deposit option. At WSOP the acceptance rate for Visa has been extremely low. Ironically Visa is the card of choice at offshore gambling sites. At many offshore sites that accept American players MasterCard is not an option. The issues appear related to payment processing and individual bank policies.

As early as 2001 many banks banned online gambling deposits. The bans took place shortly after PayPal had to pay a $10 million dollar fine to settle a a case where the federal government accused the company of violating state and federal laws. Well before the UIGEA was considered credit card companies had decided to ban transactions related to online gambling. There have been lawsuits by losing poker players seeking to recover their losses. For credit card companies online gambling had become a liability.

Chargebacks have been another problem for banks. Chargebacks take place when a cardholder disputes the charges on their credit and debit cards. Most chargebacks are the result of stolen cards and for gambling sites chargebacks can be a real problem and there unauthorized use. Chargebacks can also come from unscrupulous players trying to avoid the debt accumulated for legitimate gambling transactions. Chargebacks are expensive and time consuming for processors and banks. Experts say that regulated sites will have fewer problems with chargebacks. Licensed bingo and poker sites have legal recourse against fraudsters. At licensed sites players must be verified while registering. The effect of legal online gambling on banks and processors remains to be seen. If all goes well banks may liberalize their policies but only time will tell.

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