The online gambling industry started in Michigan back in January and since that time, the industry has continued to gain in popularity. Players are logging on in record numbers to play poker and casino games. Because iGaming is legal in the state, players can wager real money and win cash prizes. Money can be added to an online gaming account via several financial methods including debit and credit cards. However, for one financial institution, the option didn’t sit right.
Michigan Legacy Credit Union does not like the fact that online betting is so accessible, with credit and debit cards used for deposits. Because of the concern regarding financial hardship among members, the bank has now decided to ban its credit and debit cards from being used at online gaming sites.
Cutting Players Off
Once funds were added to accounts online via the Michigan Legacy Credit Union, Carma Peters, the CEO and President of the company became worried. Peters is concerned about financial issues among members, especially since the COVID-19 pandemic has impacted the economy in a major way.
Peters feels that members' debts could grow large as the industry becomes more popular and this would put the financial institution at a greater risk. Because of the concern, Peters decided as of March 2, the credit and debit cards of the MLCU will no longer be valid at online gambling sites.
The CEO stated that members are already collecting debt at the platforms that cannot be paid back. The institution is not judging gambling or online betting. However, because the facility is a member-owned credit union, it cannot afford write-offs from credit and debit cards of members.
Peters stated that before the decision was made, the facility was taking phone calls from members who had gone into debt and then realized they were in financial trouble after playing at online gambling sites. She said further that the sites allow players to go negative. If the member does not have the ability to pay the negative balance on their account, the union must charge the balance and take a loss.
Statistics from the credit union show that from the time online gambling started in Michigan until March 1, a total of 187 members completed just over 1,200 gambling transactions. The among wagered was $82,715. The average bet was over $200 and the average number of times a bet was made came in at 15.
After reviewing these details, the credit union decided that the risk was not worth the effort. The facility’s potential write-offs and reputation had to be considered in the decision to cut off cards from iGaming usage.
Surprisingly, the credit union is not the only company to stop Michigan residents from using cards as a payment method. Just a few weeks ago, Comerica told its customers that they would not be able to use cards for wagering.
It is expected that regulators will try to figure out a way to compromise with such institutions so cards can be used, but when it will happen or what might take place is anyone’s guess at the moment.