MasterCard, in a very important decision, has dropped out of processing any online gambling-related payments in the United States, a move that was done in preparation for the onset of the Unlawful Internet Gaming Enforcement Act (UIGEA), which is scheduled to be enforced starting in June. The UIGEA prohibits United States banks from processing transactions where the money is transferred to an "illegal" gambling site, and MasterCard is obviously looking to be in compliance, in advance of this law having to be enforced. This decision on the part of the one of the credit card giants has the potential to deal a big blow to the online casino industry (including
roulette casinos), and the effects are being felt by poker, casino and sportsbook websites who have U.S. customers.
Maybe another factor affecting that move was the recent ruling to uphold contempt charges against a Douglas Rennick, a Canadian businessman who was indicted last August for a number of alleged crimes related to bank transactions, fraud and internet gaming, and did not comply with a grand jury subpoena that had been issued for him.
Rennick was charged with bank fraud by U.S. Attorney Lev L. Dassin in the Southern District of New York, as he is accused of processing more than $350 million for internet gambling companies, through U.S. banks, and giving phony information to these banks about how the accounts were going to be used. This supposedly was done in order to skirt the UIGEA, which would soon make it illegal for banks to facilitate those transactions.
Altogether, Rennick was charged with conspiracy to commit bank fraud, conspiracy to engage in money laundering, and conspiracy to operate an illegal gambling business. He faces a maximum of 30 years in prison as well as a boatload of fines. The U.S. authorities also want the forfeiture of over $565 million, which they say was the amount of money obtained as a result of these "illegal gambling and bank fraud conspiracies."
MasterCard's decision screwed up a lot of business, particularly as it concerned some of the more prominent online poker sites, and players were unable to deposit and/or collect.
According to some expert observers, some players who have tried to execute transactions using MasterCard have actually been billed, but the online gaming company they were trying to pay doesn't get the funds, meaning that money was intercepted along the way. Some other players have not had a problem using their MasterCard, which might mean that some of the banks just haven't decided to comply with the UIGEA yet. MasterCard's position would appear to be pretty clear.
What set the company off, for one thing, was that they were detected some deceptiveness in terms of payments themselves. Certain transactions had used codes that were intentionally false, coded like other types of transactions, and some of them had already been declined using the code for gambling transactions. Supposedly, MasterCard actually audited tens of thousands of transactions, and did it manually, to come to its conclusions, and then took steps to close the account of any processor who was part of that kind of deception.
Because MasterCard has been a popular deposit method for gambling customers, it might take a while before the industry catches up. Gaming companies that cater to U.S. customers are asking players to use electronic wallets instead, and new processors are expected to emerge, offering hope that this problem can be addressed successfully overtime so players can continue to
play roulette and other popular casino games. However, since it won't happen overnight, and with enforcement the UIGEA looming, more trouble could be on the horizon.
