Online Gambling Payment Processing to Get Better with Pennsylvania’s Legalization of Online Gambling.
Pennsylvania becomes the fourth state to legalize online gambling and the first state to do so since 2013. The move that was made official earlier this month has drawn a lot of attention as well as bipartisan backlash but supporters of the legislation and online gamblers expect it to reignite the momentum that came with the 2013 legalization and launch of online gambling sites in the states of Delaware, Nevada, and New Jersey. As it seems, Pennsylvania is going to be a key determinant and influencer of how legislative efforts regarding online gambling play out from here on out. We should also expect to see interstate agreements facilitating significant increase in online poker liquidity in the near future.
Why Payment Processing was a Behemoth of a Problem
Payment processing in the US is a nightmare thanks to the pertinacious nature of existing legal markets and this is one key area that the Pennsylvania legislation will improve. Case in point, it came as a big surprise to find that only a tenth of credit card deposits were accepted or allowed in New Jersey online casinos when they launched on the November 21st, 2013. It is rather unsettling to know that these were actually legal online gambling sites being operated by licensed land-based casinos and were under the jurisdictions of state gambling commissions yet none of these important factors were put into consideration by payment service providers and banks – this was their way of exercising caution.
On the same note, the Unlawful Internet Gambling Enforcement Act still applies owing to the immense number of offshore online gambling sites that have always made it extremely difficult for financial service providers to effectively sieve out unlicensed sites. Furthermore, despite the risk being relatively miniscule since a little less than 4% of Americans live in the states where online gambling is legal, it was rather imperative not to take that risk – after all, no risk is always better than even little risk.
How Does Pennsylvania Come in?
It is worth noting that a lot of progress has been made. First, online gambling site operators have been educating their customers as well as extending outreach programs to banks and other financial institutions. The result has been the creation of MCC codes by major credit card providers – these codes come in handy when differentiating licensed operator from unlicensed ones. Furthermore, there has been a growing list of viable credit card alternatives including electronic payment services such as Neteller, PayNearMe, and Neteller.
Pennsylvania’s role in all these developments in payment services is embedded in the aesthetic nature of its demographics. Once the state’s online gambling sites launch in 2018, the population of US gamblers will double to 26 million from the current 13 million – Pennsylvania is the largest sate to offer legal online gambling which therefore means it has the numbers required to compel some credit card companies to go back to the drawing table. Considering the fact that nearly 8 percent of America’s population will be within any of the four gambling states, the numbers are large enough to cause some tremors in the financial market and perhaps this is the lighthouse that banks and other financial institutions have been waiting for before they dock onto the online gambling bandwagon.