Visa introduces measures to re-enter US online gambling market
After an extended absence in the wake of UIGEA, global credit card and payment processing giant Visa is readying itself to re-enter the US online gambling market in earnest.
Visa advised acquirers, issuers, processors and agents in a bulletin last month that some US resident online gambling transactions are now legal.
“issuers are reminded that not all transactions coded with Merchant Category Code (MCC) 7995 are from unlawful Internet gambling merchants”
Nevada’s first licensed online poker site already lists Mastercard and Visa as payment options. More Nevada based operators and online casinos licensed in New Jersey and Delaware will be following suit in the near future. Then there’s potential operators in the ten or so other states in the US that are considering intrastate online casino regulations of their own.
The difficulty for Visa (and Mastercard) will be differentiating the permitted transactions from those still considered unlawful. Visa hopes their newly introduced Internet Gambling Stand-In Processing (STIP) Blocking Service will solve this problem.
Online gambling sites wanting to use Visa as a customer payment option will need to sign up to their Merchant Verification Value (MVV) Registration Program. Provided they pass certain criteria they will be assigned an MVV code to signify that they are, “validated by their acquirers as processing legal transactions.” The criteria needed to get an MVV, in addition to a $5,000 fee, are:
- evidence of legal authority for the online gambling transaction (ie license from US State regulator);
- legal opinion stating the merchant’s compliance with all applicable state and federal laws (cue the lawyers); and
- third-party certification that the merchant has sufficient systems and controls (presumably the regulator would provide this).
Banks and other card issuers will need to be across Visa’s new system which in turn will necessitate internal process change and that will take time. But at least the big wheel has started to turn.
The significant takeaway here is that Visa has made a significant policy shift based on their changed view of the US online gambling landscape.
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