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Credit Card Companies Begin Online Gambling Ban Compliance

February 9, 2010 (CAP Newswire) – The online gambling world has been buzzing with the recent news that MasterCard, and to a lesser extent Visa, the world’s top two credit card financial brands, have begun cracking down on online gambling in the U.S.

Technically, online gambling is not illegal in the United States — at least, there is no penalty for players. However, the UIGEA, the Unlawful Internet Gambling Enforcement Act of 2006, does offer penalties to the financial firms and banks that allow online gambling transactions to be made. Though the UIGEA is not fully enforced at this time, and even though U.S. lawmakers recently delayed its full implementation, it appears that the world’s major credit card companies are proceeding with compliance anyway.

The news that MasterCard had begun to crack down on online gambling transactions, in the form of rejecting partners that attempt to hide online gambling activity by coding gaming transactions as alternate types of online commerce, has been all over the online gambling news media. Soon after the reports appeared, it was said that MasterCard rival Visa was starting to do the same.

On the surface, it’s an understandable move. Re-coding gaming transactions to make them appear something that they’re not is not good business practice, regardless of whether or not online gambling is illegal. To this effect, PokerStars has gone out of its way to assure eGaming Review that it was not among the sites who practiced the recoding of player transactions. (Read about the PokerStars statement here.)

Nevertheless, “the action is a sign that banks and payment companies are preparing for implementation of America’s Unlawful Internet Gambling Enforcement Act (UIGEA), which bans the facilitation of online gambling by payment companies,” writes Jon Parker at eGaming Review. Read his article here

And, true enough, the effects of this action have already been huge. According to Bluff Europe, MasterCard’s actions have forced Doyle’s Room, Bodog, and the Cereus poker network (Absolute Poker and to stop using MasterCard as a depositing option for U.S. players, at least in the short term. Those are some of the poker world’s biggest brands, and that is certainly going to have an effect on poker playing in the United States. Read the Bluff Europe article here.

It remains to be seen if MasterCard’s (and Visa’s) action represents a short-term political precaution or a long-term hostility to the online gambling world. For the meantime, U.S. players are bracing for the worst, as the option of credit card deposits, which had kept them able to play these last few years, seems to be disappearing.