Online Gambling: Checks Drawn to US Banks Will Become Thing of Past

Receiving a check these days from an online gambling site has not been easy.  Even the biggest of the bunch have been scrambling to find either new check processors or alternative methods of sending funds (i.e. Western Union). 

Depositing funds, ironically, has become one of the easier steps in the online gambling ritual.  Fewer credit cards are being declined these days compared to the time prior to NETeller and other eprocessors pulling out of the US market. 

The gift card business is thriving.  These virtual Visas and Mastercards can be purchased for one's own use betting online.  Will the US government go after these banks the way they have gone after NETeller?

Another alternative payment solution being mention in gaming circles is EcoCard. 

Dan Ramiro of StraightFlush.com disclosed to Gambling911.com that a test drive of EcoCard demonstrated the alternative payment processor may play a significant role in the online gambling industry down the road.  Ramiro is quick to point out that EcoCard has its drawbacks and his company may wait a bit before deciding if and when to implement the solution.

"It (EcoCard) works but it's not cheap," Ramiro said.  "Personally, I don't see it being the primary source (of funding) since they charge such a high fee."

Perhaps the price of doing business in a business that has taken its fair share of hits in recent months. 

Reports that up to $5000 can be transferred from player to player via EcoCard have been confirmed.  That's quite a difference from the measly $500 cap on virtual gift cards. 

But this is the deposit facet.  What about withdrawals?  What about those tried and true checks that have been a part of online gambling since its inception and part of the sports betting climate long before?

Russ Hawkins of MajorWager.com:  "You will quickly see checks coming from Canada using US intermediaries such as U.S Bank, Harris, etc, stopping (the ones that cleared the same day).

"Replacements for this in the short term will be gift cards and checks drawn on foreign banks that will need to be sent out for collections. If you are not a top rated customer at your bank, they will be holding these checks for a few weeks minimum."

Even the top rated customers may be in for a long wait.  Checks routinely take anywhere from between four to six weeks for collection. 

Some, like Allyn Jaffrey Shulman of Card Player Magazine are a little more optimistic.

"Although some banks are attempting to comply with the UIGEA now, the concept of controlling a financial institution is incomprehensive," Ms. Shulman wrote last month.  "How does a bank know from where a check comes? Let’s say an online site has a bank account with 25 signatories, such as Jack Cooper, Joe Smith, John Doe, etc. and then the site sends a check from John Doe to a US citizen who wants to withdraw some winnings. There is no possible way the bank could know that the check originated from an online site."

That notwithstanding, the South Florida Business Journal reported early last month that federal authorities have asked Florida banks to pay attention to all Internet gambling and small international wire transfers in an attempt to cut down on alleged “money laundering.”, according to Shulman.  This was also reported in the Orlando Sentinel.

MoneyGram and Western Union, once options considered for extinction in the world of internet gambling outside of a hardcore few, are again in vogue.  MoneyGrams can be sent and received at Walgreens and Duane Reade Drug Stores, just to name a few.  The question is: Do savvy impatient web surfers have the desire to use what many consider "prehistoric" (or should we say, pre-Internet) payment methods? 

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Christopher Costigan, Gambling911.com

Originally published March 19, 2007 11:24 pm ET