Credit Card Future for US Casino PlayersBy: Rick Balding, Friday February 5th 2010
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The online gambling situation in the United States is in a state of uncertainty. The previous Bush administration was pursuing a definite path to shutdown online gambling. Though the present Obama administration has not made a clear statement so far it is implementing the existing laws against online gambling. On the other hand there are a set of legislators, led by Barney Frank, who are trying to enact laws that would allow for legalization and regulation of online gambling. The online gambling fraternity is strongly supporting this move.
The US administration has realized that the best way to minimize online gambling is to cut off the supply of funds to online casinos. The funds have to pass through standard financial channels at some stage and can be stopped there. Once the transfer of funds stops then real money wagering, that drives online gambling, will also stop. In fact the UIGEA rules specifically put the responsibility on financial institutions to ensure that they do not transfer funds to and from online gambling operators. Even before the UIGEA rules were supposed to be implemented in December 2009 many credit card companies had stopped processing transactions meant for state lotteries because they were not sure whether such transactions were covered by the UIGEA or not.
Though the implementation of the UIGEA rules has been deferred by six months to June 2010 the credit card companies are in a quandary. Though the revenue generated from processing online gambling transactions in the United States is a significant proportion of their income, it is still only a part of the global income of credit card companies. By getting involved in costly legal proceedings with the attendant fines and penalties, the credit card companies stand to put at risk their global profits and reputation. This would adversely affect their stock price and this is something the stakeholders would not want.
The breaking news is that MasterCard will no longer be processing online gambling transactions in the United States. This decision follows the contempt of court order handed down to financial processing companies who have been indicted for disbursing online gambling payments to US customers. MasterCard had also earlier attempted to block online gambling merchants. But at that time the merchants were able to remove the code from their software which identified them as gambling operators. Obviously MasterCard must have come up with a better plan this time. There are strong rumors that Visa is also planning a similar move.
Even if the major credit card companies successfully stop processing online gambling transactions, it is unlikely that online gambling in the United States will come to an end. The emergence of a large number of alternative payment methods, such as e-wallets and electronic checks, has reduced the dependence on credit cards. If credit cards disappear from the scene then these alternative payment methods will completely take over. If the lobby in favor of online gambling is not able to get the legalization and regulation bill passed soon, then the government may clamp down on the alternative payment methods as well. This can be done by making funds transfers to such methods illegal.
The final option that will remain with online gambling players in the United States is to fund their online casino accounts using prepaid cards purchased with cash. Such cards are already common in many European countries and do not leave any trail in the regular financial sector. The player purchases an alphanumeric code by paying cash and then enters that code at the online casino. This results in his online casino account being funded by the required amount.
US players looking for top rated online casinos that are currently fully able to accept deposits using Visa, MasterCard and Amex should click here.
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