In recent days, online poker players trying to use Visa and MasterCard credit cards to deposit funds into their accounts have experienced major setbacks. Due to what eGaming Review dubbed an “overnight tightening of restrictions,” deposits are now down sharply on some of the industry’s largest sites. Poker News Daily sat down with an insider in the world of payment processing to break down what happened.
Poker News Daily: Do you believe that it was ever acceptable for MasterCard to process an online poker transaction after the Unlawful Internet Gambling Enforcement Act (UIGEA) was passed in the United States in 2006?
It hasn’t been legal for MasterCard or Visa for over 10 years now, so this is nothing new to U.S.-facing companies in particular. What is new is the way they have caught people who were circumventing their rules.
PND: Are all transactions related to internet gambling blocked or just credit card deposits?
They are not blocked everywhere. Some seem to be operating MasterCard with no issues.
PND: Are daily transaction counts down as a result or are online poker players finding other ways to get money online?
From what I have been told, cash in is down significantly. Obviously, if you take a credit card channel as big as MasterCard away from your portfolio, there will be a big hit.
PND: Do players realize that their funds aren’t being deposited using credit cards?
The players are not notified. The deposits go through and they will still be billed for the transaction. The issue is that the gaming company never receives the funds, as they are “intercepted.” The processor the gaming company used then has their account with MasterCard closed and they are fined; this is usually passed on to the gaming company directly.
PND: Does a player lose the intercepted funds?
If MasterCard closes the middleman down, they keep all funds frozen until they ascertain what happened. The player gets billed and knows nothing. The player gets his money in his gaming account and has his credit card billed. We basically just gave him free money. These companies do not settle instantly with the poker rooms and that is where the big risk comes. MasterCard doesn’t settle with the processor instantly either.
PND: How did MasterCard block internet gambling transactions?
Rumor has it that they audited thousands upon thousands of transactions manually. They looked at coded declines and then at subsequent approved transactions. This would tell them that they were being “bounced” to another uncoded source. They deemed that these transactions were illegal and closed down the processing account attached to them.
PND: Is the recent MasterCard blocking due to the UIGEA, charge backs, or some combination of both?
I’m not sure about their motives. MasterCard has always been more aggressive than others with this. We have been warned for many months that this was coming, but there is no way of knowing until it actually happens. As always, this industry is resilient and will bounce back. It always has and it always will.
PND: What has been the reaction of players you’ve talked to at your site?
Players are used to cards being declined fairly regularly. Obviously, some want to know why, so we try to direct them to other trusted methods such as e-wallets wherever possible.
PND: Can online poker players use debit cards to deposit?
MasterCard does not run debit cards. Visa or the bank runs them usually. I know that Canada shut off most debit cards to poker companies last year. TD, Scotia Bank, and RBC all stopped too.