Credit Card Guide
  CREDIT CARD NEWS / CREDIT CARD ADVICE
Follow Us  RSS twitter facebook You Tube Google+
 

Credit Cards > Credit Card News > Credit Cards General > Visa, MasterCard Move to Curb Online Gambling



 
 

Visa, MasterCard Move to Curb Online Gambling

 
By Eva Norlyk Smith, Ph.D.
March 4, 2010
tools
tools
email print comment
tools
SHARE

Signing up for an online round of Texas Hold’em used to be as simple as purchasing a pair of pants on LandsEnd.com: simply fill in your credit card information and submit. However, the world of online gambling recently was rocked, as credit card giants Visa and Mastercard took steps to curtail credit card usage for online gambling.

MasterCard was the first to block internet poker players and other gamblers from using their credit cards to deposit money on online gambling sites, and last week Visa followed suit. While neither Visa or MasterCard have announced their reasons for the crack-down, many speculate that the credit card giants’ moves came in anticipation of the new Unlawful Internet Gambling Enforcement Act (UIGEA), which was passed in 2006 and is due to step into effect on June 1 this year.

The UIGEA calls for the blocking of all “unlawful Internet gambling transactions,” a phrase that many gambling proponents denounce as too vague to properly enforce. Lobbying efforts pushing this argument so far have succeeded in postponing the implementation of the new internet gambling law for another six months, from December 1, 2009 to June 1, 2010.

Internet gambling has been sharply on the rise, and credit cards have been key players (no pun intended) in enabling this increase. Since 1997, online gambling has doubled every year, spurring a fierce legislative fight to get online gambling more closely regulated. Consumer advocates, however, worry that introducing further government regulations of online gambling will amount to little more than legalizing it through the back door.

Consumer advocates point to the risk for consumers: 15 million people display some sign of gambling addiction, and young adults are particularly susceptible: according to studies, 76 percent of 18-year-olds engage in gambling. With the proliferation of student credit cards, college students are at even more vulnerable; about three out of four students now have a credit card, students are very comfortable with the internet, and most have 24/7 access to free, high-speed connections in dorm rooms and throughout campus.

The Visa and MasterCard crack-down affects almost all credit cardholders, with the exception of those using Discover and American Express. Visa and MasterCard are the world’s largest electronic payment processing companies; every single credit card transaction charged to cards issued by e.g. Citicard, Bank of America, Chase, Capital One, and other are processed through either Visa or MasterCard. In short, if the ban remains in effect, all online gambling transactions using credit cards bearing the Visa or MasterCard logo will be blocked.

It remains to be seen if the Visa and MasterCard crack-down is a long-term policy change or a short-term exercise. However, don’t expect online gambling sites to fold just because the two credit card giants have withdrawn their support: online players still have a variety of internet payment options available, including Echecks, Ewalletexpress and Usemywallet, which facilitate quick and secure bank-to-online-casino transfers. And as long as payment options are available, consumers are likely to continue to “shuffle up and deal.”


Share 
 
     

 
 

VIEW RELATED STORIES

Visa, MasterCard Want to Link Purchases to Ads - What you charge on your credit card eventually may determine what ads you see online, according to a new report. The Wall Street Journal obtained documents indicating that Visa and MasterCard are working on strategies to link Web users with credit card purchases.

DOJ Signs Anti-Trust Deal with Visa, MasterCard - Last week, the U.S. Department of Justice announced that it had reached a settlement with Visa and MasterCard under which they agreed to no longer restrict merchants from offering discount incentives to customers.

Visa, FTC Crack Down On Online Credit Card Abuse - In an unprecedented move, Visa Inc. last week took steps to boot out 100 merchants for credit card abuse linked to deceptive marketing practices. The scams involve bogus free trial offers that that trick consumers into unwittingly signing up for recurring monthly credit card charges.

ALL CREDIT CARD NEWS & ADVICE ARCHIVES >>

 
     

 
 

Comments are closed.

 
     


               
Validate TRUSTe privacy certification        
Best Credit Card Offers With
Online Applications

0% APR Balance Transfer
Cash Back Cards
Low Interest Cards
Airline Miles & Travel Reward
Credit Cards

Business Credit Cards
Gas Rebate Credit Cards
Car Rebate Credit Cards
Instant Approval Cards
Establish Credit, Credit Cards
Student Credit Cards
Prepaid Cards
Rss Feeds RSS Feeds
Twitter Twitter
Facebook Facebook
You Tube YouTube
Google+ Google+
About Us
Contact Us
Editorial Team
Media Relations
Privacy
California Privacy Rights
Terms of Use
Site Map
Canada Canadian Cards
UK U.K. Credit Cards
Australia Australian Cards