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No one doubts that the offshore gaming industry is here to stay; however, the process by which customers fund their accounts is becoming increasingly difficult. Visa and MasterCard, by far the most widely used credit cards, are cracking down or even banning the use of their cards for online sports or casino gambling. Many card issuers are fed up with both illegitimate operators and customers who repeatedly deny charges, saying they don't gamble.
Some Internet casino operators claim that four out of five credit card transactions are now being denied. This has caused a revenue drop of at lea st 30% in those casinos catering to the U.S. market where 80% of all wagers are made.
Wells Fargo Bank, a major issuer of debit and credit cards, stopped accepting gambling related purchases in December of 2000. MBNA and Providian have since followed suit, along with a host of smaller issuers. MasterCard International has issued several statements condemning the issuance of merchant accounts to such entities.
Visa has started auditing Internet casinos to make sure they are accurately reporting transactions as wagers, and are not trying to mask the transaction as something else to make sure it is approved. Many companies are playing roulette with their merchant accounts, always at the ready to open a new one should they be caught processing outside the stringent rules required by the card issuers.
American Express and Discover disallowed the use of their cards several years ago for online gaming. The companies simply did not want the hassle or fall out of processing "high risk" transactions.
The biggest threat to credit card issuers and online casinos alike comes from the ease with which fraud can be committed over the Internet anonymously. The FBI recently nabbed part of a group of Russian hackers that had stolen 15,000 credit card numbers from Western Union and had been terrorizing numerous types of Internet companies, including online casinos. The casinos probably took the biggest hit because of the propensity of their customers to commit fraud since the industry already has an unsavory reputation.
The software used to run many of these companies has been developed by home-trained programmers or by those with less than an Ivy League education. This often leaves giant holes in the back end of the software, allowing cyber-criminals access to sensitive personal customer information, including credit card data. All legitimate online casino operations have elaborate networks including firewalls and anti-virus software to keep out potential thieves. However, in cyberspace, it is becoming increasingly difficult to stay one step ahead of hackers.
On the customer's side, many people quickly get hooked on the casino games and sports betting offered at these sites. Many start pumping their debit or credit card information into these sites, spending their savings and running up hundreds or even thousands of dollars in debt. These people then panic, realizing they could not afford such losses and their only recourse is to deny the credit card charges.
Michael Rosen is a freelance writer. The opinions expressed do not necessarily reflect the opinions of bettorsworld.com
Some Internet casino operators claim that four out of five credit card transactions are now being denied. This has caused a revenue drop of at lea st 30% in those casinos catering to the U.S. market where 80% of all wagers are made.
Wells Fargo Bank, a major issuer of debit and credit cards, stopped accepting gambling related purchases in December of 2000. MBNA and Providian have since followed suit, along with a host of smaller issuers. MasterCard International has issued several statements condemning the issuance of merchant accounts to such entities.
Visa has started auditing Internet casinos to make sure they are accurately reporting transactions as wagers, and are not trying to mask the transaction as something else to make sure it is approved. Many companies are playing roulette with their merchant accounts, always at the ready to open a new one should they be caught processing outside the stringent rules required by the card issuers.
American Express and Discover disallowed the use of their cards several years ago for online gaming. The companies simply did not want the hassle or fall out of processing "high risk" transactions.
The biggest threat to credit card issuers and online casinos alike comes from the ease with which fraud can be committed over the Internet anonymously. The FBI recently nabbed part of a group of Russian hackers that had stolen 15,000 credit card numbers from Western Union and had been terrorizing numerous types of Internet companies, including online casinos. The casinos probably took the biggest hit because of the propensity of their customers to commit fraud since the industry already has an unsavory reputation.
The software used to run many of these companies has been developed by home-trained programmers or by those with less than an Ivy League education. This often leaves giant holes in the back end of the software, allowing cyber-criminals access to sensitive personal customer information, including credit card data. All legitimate online casino operations have elaborate networks including firewalls and anti-virus software to keep out potential thieves. However, in cyberspace, it is becoming increasingly difficult to stay one step ahead of hackers.
On the customer's side, many people quickly get hooked on the casino games and sports betting offered at these sites. Many start pumping their debit or credit card information into these sites, spending their savings and running up hundreds or even thousands of dollars in debt. These people then panic, realizing they could not afford such losses and their only recourse is to deny the credit card charges.
Michael Rosen is a freelance writer. The opinions expressed do not necessarily reflect the opinions of bettorsworld.com
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