Legalized Banking and Banks
The New Jersey Internet gaming five day soft launch has gotten underway, however, there is an early hiccup with banks and credit cards who are failing to process transaction for payers. After the UIGEA (Unlawful Gambling Enforcement Act) was enacted during 2006, many of the financial institutions implemented systems that rejected any gambling transactions. Now the law has changed in individual states and some have legalized online gaming, this means that banks and credit card companies need to adapt to the new laws. Bloomberg reported that Wells Farge & C., American Express and PayPal are refusing to allow online gaming transactions due to previous guidelines that were established, and/or they fear that the institutions would be held liable for any under-age gambling or people who bypass the geo-location restrictions. In order to remain within the law here is the situation regarding the different financial institutions:
Visa and MasterCardThese two institutions allow transactions in the states where gaming is legal, however, they leave the ultimate decision with he individual banks or card issuers, check with your bank if gaming transactions are acceptable.
Bank of AmericaAt this stage Bank of America is not allowing transactions under any circumstances, but they are reviewing the situation on whether to allow to change their policies and permit in the future. Wells Fargo and Discover Financial Services Both institutions will no allow gambling transactions they both cite federal compliance issues for their reasons.
PayPalPayPal cite internal policies for their reason for not processing gambling transactions, there is a possibility of this changing in the future. David Rebuck, the Director of Gaming Enforcement in New Jersey said that gamblers will have struggles to have accounts funded through the traditional means with individual’s banks, however many will do it through alternative means, or that they will find other banking institutions that will allow them to have transactions accepted. The alternative means for funding accounts consist of wire transfers, Automated Clearing House transfers, deposit options in brick and mortar, and checks. Gaming Enforcement banking has reached out to the various payment processors as well as US Department of treasury for help in paving the way for online gambling payment processing. Mr Rebuck said that the government is trying to build confidence in the banking world and that the private sector was also working to gain confidence with their banks. Recently a hearing was held at Caesars Interactive Entertainment, a casino approved for license, by the Casino Control Commission of New Jersey, and CEP, Mitch Garber of Caesars felt confident that the banks will come on board eventually. Mr Garber said that if asked why California, Illinois or New York have online gamins, he would reply that they will in future, he stated those institutions that are still uncertain will get comfortable with it once they see others experience of it, they will see it well-regulated, well-run, well taxed, and responsibly managed, they will come on board.
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