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New Jersey State Senator Raymond Lesniak, speaking via Skype at the Mobile and Tablet Gambling Summit USA at Bally’s on Monday, said he still has great hopes for Internet gambling in New Jersey but blamed credit card processing banks for stymying growth.
If there is one complaint heard most often from state residents when it comes to trying to join an NJ regulated online gambling site, it has to do with declined credit cards. Many card issuing banks, including Wells Fargo and Bank of America, still wont permit transactions for online gambling.
“Don’t expect stellar results until the major credit card companies come on board,” Lesniak said of the sector’s underperformance since Web gambling became legal last year.
Alex Bumazhny, a gaming analyst at Fitch Ratings, told the Press of Atlantic City he believes the credit card processors simply need to better understand the current climate of i-Gaming.
“I think it’s just a matter of educating the payment processers that it is indeed legal,” he said.
But federal law says otherwise and therein lies the problem.
When prohibition passed in late 2006, the banking institutions took the stance that they were dealt with an unfunded mandate. They were asked by lawmakers to police the industry and differentiate between the so-called “good” and “bad” actors.
The “good” actors are fantasy sports operators, horse racing and lottery platforms. The “bad” included poker sites, sports betting and online casino operators.
The banks decided to take a blanket approach to online gambling as a result of prohibition (Unlawful Internet Gaming Enforcement Act). This meant that many of the larger credit card issuing banks now consider all online gambling establishments illegal.
Lesniak’s concerns were echoed by Paddy Power executive Eamonn Toland. Speaking as part of a panel Monday, he said the refusal of companies to process online gambling payments “is one of the biggest challenges to the industry.
- Aaron Goldstein, Gambling911.com
