Visa Changes the Rules for Online Casino Malaysia
Credit card company Visa is clamping down on online casinos transactions starting this week, in order to protect itself from lawsuits and government legislation. And that may affect Internet bettors everywhere.
Credit cards have been the predominant payment method at online casinos and sportsbooks for years, so much so that Visa set out operating regulations for Internet gambling transactions in June 1998 and again in November 1999. But those regulations haven’t been enforced – until this fall.
Visa has decided to crack down on merchants for two reasons: the introduction of legislation in the U.S. that seeks to ban the use of credit cards in Internet betting, and a series of lawsuits from people who used their Visa cards to gamble online.
On October 31, Rep. James Leach of Iowa reintroduced a bill that would prohibit the use of credit cards, checks, and debit cards in online wagering. While the implications of the bill are widespread, the real concern for Visa is that the company would be responsible for policing card use.
Visa has also faced a number of lawsuits in recent years from gamblers who have racked up tens of thousands of dollars of bad debt while using their credit cards to gamble online. The cardholders alleged that Visa was at fault for allowing them to illegally bet at Internet casinos, and the company ultimately has to absorb the losses.
Visa has announced that as of November 15, 2001 it will be cracking down by auditing all transactions from merchants that offer ‘gambling services’ in order to protect itself from both lawsuits and legislative prohibitions, as well as what it calls “the possibility of brand compromise” and “the added costs resulting from dispute resolution.”
But how does Visa know where the transactions originate? Online gambling merchants are required to use special tracking codes to identify the transactions as gambling services. Some casinos haven’t been using the appropriate codes, however, and therein lies the problem that Visa is trying to address.
The goal of the program is to ensure that the Online Casino Malaysia casinos are sending the correct information to card issuers and allowing the issuers to make an informed decision about processing the transaction.
Visa has announced that it will be fining the issuing bank US$25,000 per casino for every incorrectly identified transaction. Institutions that continue to process these transactions will be subject to escalating fines and the merchant account will be cancelled.
The new policy spells things out for the casinos, but it may not solve all the problems because casinos can obscure their identities with generic names.
Players from the U.S. will probably notice the new policy the most. Some casino sites that previously accepted Visa cards from U.S.-based banks may not be able to process these transactions any longer. Other sites may choose not to accept any Visa card to avoid the hassle.
What all of this likely means is that casinos will push players towards online payment alternatives such as PayPal and FirePay – especially if the Leach bill passes.
The best way for players to avoid disappointment when making casino purchases is either check with their credit card issuer before going online or find a suitable e-cash alternative. And the latter might be the smartest choice of all, because auditing transactions may well be the first step to blocking them.