Online poker has been available in the United States for more than a year now, with only three individual states offering legalized gaming. Delaware, New Jersey and Nevada all have passed legislation and put regulations in place to allow residents of the state as well as visitors located within the borders the opportunity to take part in gaming online. When the process first began, financial institutions were leery of providing financial assistance with processing withdrawals and deposits for online poker players. With time, the industry felt as though these institutions would feel better about transactions but this does not seem to be the case.
Many companies such as banks and financial institutions do not want any part of online gaming transactions. After seeing what happened after the Unlawful Internet Gambling Enforcement Act was enacted in 2006, banks did not want to become involved. The UIGEA prohibited banks from working with illegal online gaming sites.
Many in the financial industry feel as though it is understandable as to why such institutions would not want to be involved with online gaming. After the UIGEA was created in 2006 and the indictments taking place due to Black Friday in 2011, banks want to be cautious as to how they go about handling online poker gaming transactions, if they even take part at all.
Since institutions are not getting involved in the process of depositing and withdrawing funds, the regulated online poker industry in the US has suffered. To help with the issues of bank transactions, industry leaders have met with banks, credit card companies and processors to explain the process. Even after discussions of geolocation and fraud controls, the companies are still not interested in being involved in such matters.
Just a few weeks ago, new merchant category codes were created to help with the process of transferring funds with a credit card. Codes were created for every gaming category to help with gaming transactions, even a code created for unregulated online gaming transactions.
Once the new codes were put in place, the industry did see a nice average of successful deposits but more work is needed to reduce the amount of financial transaction declines in the industry. Financial institutions have the right to choose not to process online gaming transactions, whether the transaction is legal or considered illegal. Some banks do not understand the legal attributes of the industry while others do not want to be associated with the gambling industry.
Many financial institutions are just following the UIGEA and want to be sure they are not breaking any laws when it comes to online gaming transactions. Despite the new codes, many institutions plan on continuing to avoid offering assistance when it comes to online gambling transactions. It is believed that certain companies feel as though their reputation will be damaged if they are associated with online gambling.
The market of online gaming will need to grow significantly for the banks and other financial institution to feel comfortable enough to allow transactions to be processed. The revenue is not there to drink the financial companies to become involved in the online poker and gaming industry.
For now, the new codes will help to assist with a decline in accepted players transactions in the three states of the US and will serve as a stepping stone for the industry to continue to grow and thrive. It will be interesting to see as more states begin to legalize online gaming if the credit card companies and banks will begin to open up to online gaming and providing financial assistance when it comes to deposits and withdrawals.