New Jersey Aims to Appease iGaming Payment Processors
In an effort to prompt financial institutions to more readily accept credit card deposits, New Jersey plans to strengthen payment processing requirements.
The reluctance of banks and credit card companies to process financial transactions from gamblers hoping to deposit at regulated gaming sites in New Jersey has been hindering progress in the state’s igaming scheme. Despite being completely legal to do so, the financial institutions have balked at pushing the deposits through.
A bill proposed three months ago is aimed at easing the minds of payment processors by requiring them to be fully licensed in the category of casino industry service, AP reported. As it stands now, only an ancillary license is needed to process transactions.
During the East Coast Gaming Congress held in Atlantic City yesterday, New Jersey Sen. James Whelan mentioned that the new measure would likely give financial institutions greater
assurance when faced with deposit requests from gamblers. Financial instititutions have been leary about processing such transactions since passage of the UIGEA in 2006 and even more so following the DoJ’s crackdown on offshore sites operating in the U.S. on Black Friday in 2011.
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The New Jersey Division of Gaming Enforcement (DGE) recently released revenue numbers for the state’s online poker and gambling industry for April and it was the first month since launching in November that showed a decrease. Revenue from igaming has thus far failed to meet expectations and the hesitancy of payment processors has been cited as one of the main reasons that projections have not been met.
Since November, Mastercard has processed 73% of transactions from New Jersey online gamblers, while Visa has pushed through only 44%, the DGE reported. Discover and American Express fail to recognize the validity of such transactions.
In addition to problems facilitating deposits of customers, New Jersey’s online gambling scheme has also been besieged by geolocation issues that have prevented some state residents from being able to gamble online. That issue is constantly being addressed and has gotten better and is expected to eventually be fully resolved in due course.
Payment processing has also improved in the six months that the state’s online gambling regime has been operating, but as is evidenced by the statistics of successful transactions, there remains a long way to go in rectifying the issue.
Boyd Gaming president Keith Smith believes that the proposed bill will make a big difference in convincing financial institutions that the casinos running gaming sites know their customers and that all activity is legally being undertaken within New Jersey. Boyd has a stake in Borgata, which operates the most popular online poker site in the state.
Revenue decreased to $11.4 million last month after March totals equaled $11.9 million. New Jersey’s online poker and gambling industry had been steadily rising until stalling in April.