Credit-Card Issuers Hampering U.S. Online Gambling Efforts
While online gambling in the U.S. is up and running in two states and is set to launch in New Jersey on Nov.26., there are still banks and credit card companies that have not got the memo. Despite the fact that Nevada, Delaware and New Jersey are fully legal to offer internet gambling, credit-card issuers of American Express, Wells Fargo & Co. and even Ebay’s PayPal are not permitting consumers to wager online.
With estimates that online gambling in the U.S. can reach up to $7.4 billion, the fact that major credit cards companies are not coming to the party has got online gaming operators up in arms.
The reasons for Visa, MasterCard and PayPal refusing to process gambling transactions vary according to each individual company. Visa and MasterCard have raised concerns of underage gambling while PayPal and American Express claim it is in conflict with their acceptable use policy, Banks have also raised concerns of potential legal claims from illegal bets placed with credit cards according to the banking association. Currently player’s wishing to gamble online need to be physically located within the state.
While the launch of internet gambling is still largely restricted to only a few states, this situation is likely to change as various states sign interstate deals which would allow a wider player base. While it is understandable for there to be a few minor hiccups in the online gaming industry, the financial institutions will need to keep up with the legal statutes in order not to hinder the growth of a multi-billion dollar industry that is vital to the U.S. economic recovery.