iGaming payments rejected by US banks
A number of US banks are refusing to process iGaming payments despite online gambling having already been legalised in two states.
The Dispatch.com website reported that Bank of America, Wells Fargo and American Express, as well as internet payment processor PayPal, are not allowing online gambling transactions.
Delaware recently joined Nevada as the second state to offer online gambling services, while New Jersey is scheduled to go live on November 26.
Despite the growing online gambling market, some Visa and MasterCard issuers have expressed concerns about potential liability for underage wagering or other violations, while American Express and PayPal do not process gambling transactions of any kind.
“There are still things that can go wrong, even with controls in place,” American Bankers Association’s vice-president for regulatory compliance, Steve Kenneally, said.
Players in Delaware have encountered problems with gambling transactions when using a Visa or MasterCard, while Nevada players have reported difficulty in opening accounts since it went live with online gambling earlier this year.
The issues are present despite Visa and MasterCard both allowing gambling-related credit card transactions on their networks in the US.
“Visa has updated its procedures to code newly legalised internet gambling transactions so that financial institutions can identify and process them in states where they are allowed,” Visa spokeswoman Rosetta Jones said.
Bank of America said that it is currently reviewing whether to permit online gambling transactions, while American Express does not allow its cards to be used for any type of gambling.
Wells Fargo and Discover Financial Services do not allow their credit cards to be used for online gambling due to cited federal compliance issues, while PayPal said that internal policies have halted it from allowing transactions, but these policies are subject to change.
Kenneally added that the banks are concerned that they may be held liable for illegal bets placed with their credit cards.
Banks programmed their card payment systems to reject all gambling transactions after Congress passed the Unlawful Internet Gambling Enforcement Act in 2006.
Nevada, Delaware and New Jersey must now work with the banks to alter these set-ups in order to accept the transactions they have been blocking.