Visa has become yet another credit card company to expressly forbid the use of its card to provide funding for online gaming accounts. This particular "ban" applies to U.S. players only; foreign markets, at least in those jurisdictions where online gaming is not illegal, have not been affected.
Of course, their reasoning is easy to understand; there is a black cloud looming over the industry in the form of the
UIGEA (Unlawful Internet Gaming Enforcement Act), which is going to be implemented soon, barring any further reprieves. Visa made the decision to put all its mechanisms in place in anticipation of the UIGEA being fully enforceable, something that is on target to take place on June 1 of this year.
Thus, Visa follows MasterCard, its chief rival in the United States, which had previously banned its card from being used in the online gaming world. Visa's decision probably has more impact, insofar as it is the largest credit card issuer in the United States. Visa, like MasterCard, falls into the category of "financial institution" and they are subject to jurisdiction through the UIGEA legislation.
So how will Visa execute this ban? Well, for one thing, they are going to refuse all transactions that come from a United States resident using the code that identifies internet gaming transactions.
Many players who made attempts to use Visa to fund a gaming account were sent the following stern message:
“Status: DECLINED.
“Your credit card transaction has been declined. If your credit card information was entered correctly and you have sufficient funds, your transaction was probably declined due to Internet gaming restrictions set by your credit card issuer.”
Incidentally, the most prominent credit card issuers include companies like Bank of America, Capital One, MBNA, Providian, Citibank, and Chase.
Naturally, Visa is aware that certain casino operators haven't coded the transactions they make with customers as "7995," the one that is particular to internet gambling, but instead have disguised these transactions by using another code and will continue to do in the future if they possibly can. However, one thing they have decided is to also bar use of its card by third parties for the purpose of funding gaing-related accounts. Essentially this applies to the e-wallets (Click2Pay and UseMyWallet are two examples) which have in the past used Visa cards as a conduit through which to fund gaming accounts.
Certainly it has to be acknowledged that Visa turned a blind eye to a lot of internet gaming business being done using its product because it meant millions of dollars of revenue from honest customers that enjoy to
play roulette and other online casino games. However, with the UIGEA ready to roll, it was the company's rationale, it would seem obvious, that it could not continue to process that kind of transaction, or to at least take any steps possible to prevent it. In the big picture, it meant nothing to them that they might lose quite a bit of revenue by taking themselves out of the ballgame, and the whole state of affairs has the industry at least mildly concerned.
There is some hope in the person of Barney Frank, the U.S. congressman from Massachusetts, who has been tirelessly campaigning to get the UIGEA repealed in favor of his own piece of legislation that would call for the legalization and regulation of online gaming, with tax revenue being produced. Congressman Frank was able to get the kickoff of the UIGEA delayed from December to June, and if he can get another delay he might be able to buy time to gain support for his proposed bill. However, that is not something you want to bet on.
