May 18th 2010
Visa is now the latest credit card company that has forbidden the use of its card to fund online gambling accounts. The "ban" applies to U.S. players only; to the best of our knowledge the international sector, at least in those jurisdictions where online gambling is not illegal, is not affected at all.
Of course, the reasoning behind this reflects the concern lurking over the industry because of the the fact that the UIGEA (Unlawful Internet Gaming Enforcement Act) is going to be implemented soon, barring any further delays. Visa's actions are a signal that it is putting the machinery in place in anticipation of the UIGEA being in full force, a state of affairs that is slated to take effect on June 1 of this year.
Visa is following MasterCard, its chief competitor in the United States, which had previously taken steps to prevent its card from being used. Visa's decision actually has more impact, in all probability, because its is the biggest credit card issuer in the United States. Like MasterCard, Visa falls into the category of "financial institution" and like banks, they are covered in the UIGEA legislation.
So how will Visa implement this ban? Well, for one thing, they will refuse any and all transactions coming from a United States resident that use a code that would be specific to internet gaming transactions.
Many players who tried to use Visa to fund a gaming account were sent the following message:
“Your credit card transaction has been declined. If your credit card information was entered correctly and you have sufficient funds, your transaction was probably declined due to Internet gaming restrictions set by your credit card issuer.”
For your information, the most prominent credit card issuers include companies like Bank of America, Capital One, MBNA, Providian, Citibank, and Chase.
Of course, Visa is well aware that there have been slots casinos who have not coded the transactions they make with customers as "7995," that which designates internet gambling, but have instead disguised it by using another code and will continue to do so as long as possible into the future.
Visa has also decided that it will be a violation of its rules to have third parties funding accounts using its card. Basically this applies to the electronic wallets (Click2Pay and UseMyWallet are examples) which have customarily used Visa cards as an avenue by which to fund gaming accounts would not be able to do so.
Certainly it must be conceded that Visa turned a blind eye to much of the internet gaming business being done under its banner because it meant millions of dollars of revenue to them. However, with the UIGEA on the horizon, it was the rationale of the company that it could not continue to process that kind of business. Apparently it meant nothing to them that they might lose quite a bit of money by disqualifying themselves from these kinds of transactions, and all of this has the industry at least mildly worried.
Some glimmer of hope exists. Barney Frank, the U.S. representative from Massachusetts, has been lobbying to get the UIGEA repealed in favor of legislation he has authored that would call for the legalization and regulation of certain forms of online gaming, including playing casino slots, providing tax revenue. He was able to get the implementation of the UIGEA delayed from December to June, and he would like to get another delay in order to buy time to gain support for his proposed bill, although that is looking like more of a longshot with each passing day.