Casinos in New Jersey that run online poker and gambling sites are counting on the implementation of a new credit card code to increase revenue.
The code – 7801 – was launched on Friday and will permit financial institutions to see that credit card deposits made by gamblers at New Jersey igaming sites are fully legal. Whether banks will adhere to the new code remains to be seen.
It was revealed by the New Jersey Division of Gaming Enforcement in January that players who attempted to deposit using Visa in 2013-14 were successful only 73% of the time. The rate of success was even worse for Mastercard holders, as only 44% of deposits were pushed through.
It is not known how many of those players used an alternative method to deposit such as e-wallets or wire transfers. It is believed that many became frustrated at the failure to deposit and stopped trying instead.
Goodbye to 7995 in NJ
The old Merchant Category Code (7995) reserved for online casinos has been used for many years. Following passage of the UIGEA in 2006 that made it illegal to accept such deposits, banks began blocking transactions with that code number. Which is why a number of offshore sites set up phony Internet businesses such as sporting goods stores and florists – in order to be placed under a non-7995 code and circumvent the system.
The new code is in play only in New Jersey. The UIGEA is still in force in most of the rest of the country and it may keep major banks from recognizing 7801, not wanting to get involved in transactions of that nature regardless of its legality in just one state.
While Americans have gotten more acclimated to facilitating online transactions using other methods, credit cards remain the preferred way to make Internet purchases. That includes depositing at online poker and gambling sites.
More Regulated iGaming States Needed
Skeptics believe that the new code in New Jersey will not be enough for banks to change their ways of blocking credit card deposits made to online casinos. Not until more states climb aboard and get in on the action as well.
New Jersey igaming generated almost $123 million in 2014, a drop in the bucket to banks that are not prepared for a state-by-state format of legalized gambling. Many would seemingly prefer to block the transactions, citing the UIGEA as a major reason.
In any event, the 7801 code can only help New Jersey in its desire to process the deposits of Visa and Mastercard holders. How much it will help is up to the banks who decide whether or not to accept the transactions.
The success rate of deposits with the new Merchant Category Code certainly won’t reach 100%. But it should become a lot better than the roughly 60% seen when combining the results of attempted deposits of the two major credit cards.