VISA and the Online gambling transactions

This week, the famous credit card company VISA contacted and informed its partners (processors) that not all online gambling transactions are created equal. In its bulletin directed to its acquirers, issuers, processors and agents, VISA stated that while the Unlawful Internet Gambling Enforcement Act (UIGEA) made processing payments for “unlawful” online gambling companies illegal, “issuers are reminded that not all transactions coded with Merchant Category Code (MCC) 7995 are from unlawful Internet gambling merchants”. 

Bad records in Online gambling transactions: BLACK FRIDAY

Taking the Black Friday as an example when gambling companies were accused of deliberately misclassifying customers transactions into innocuous ones… such as purchases of golf balls and other non gambling related items in order to avoid UIGEA’s regulations, the 7995 code groups several transaction types into a single category including:

• everything related to lottery tickets,
• casino chips,
• online betting, etc.

We guess that the situation might change after legal institutions such as state lotteries are starting to operate in the online world and the legalization of some types of online gambling in several US states – with Nevada licensed online poker site as the pioneer that includes MasterCard as one of its funding methods.

All in all, the new trend of regulating online gambling activities in an open perspective will force credit card companies to modify their approach and in consequence, their regulations.

VISA tools presented:

VISA announced a couple of measures to help its clients stay compliant. Its service called STIP (Internet Gambling Stand In Processing) distinguishes legal from potentially illegal gambling transactions. Their base is a registry of validated Merchants who obtained a MVV (Merchant Verification Value). The MVV provides a unique code that grant the transactions involved as “legal”. The procedure has a registration fee of $5000 and starts when the merchant provides evidence of proper legal authority for the gambling in question including a legal statement that confirms the merchant’s compliance with all the state and federal laws, third-party certifications about the security of their systems and controls to ensure the stability and customer protection within lawful limits.

As noticed, this is a complicated matter and the financial authorities probably will take some time until they adjust their regulations to follow the liberalization of the online gambling in the United States but as previously mentioned in other articles at Cool Online Casino these are great news!

We noticed while reviewing several casino websites, that most of them use VISA to process online gambling transactions, as one of their payment methods and we consider the new regulations as a step forward in this matter. What do you think? Would you use your personal credit card to gamble online?

Let us know your comments!