Credit Card Companies Move Toward Regulated US iGaming Transactions

New Merchant Category Codes (MCC) set to be introduced on April 17th might ease the lives of players and online gambling operators in the US.

Banks Limiting Payment Methods

One of the biggest issues that faced iGaming in the US since the introduction of online gambling regulation in New Jersey, Nevada and Delaware back in November 2013 was payment methods. Despite regulation, banks and other financial bodies simply refused to process payments in the region of online gambling, blocking transactions even in regulated sites. This also affected players' ability to sign up and open an account with online casinos.

New Codes

The new codes (7800/1/2) apply for "State-run" online lotteries, casino games and dog/horse racing. Whether this will help things out or not is yet to be known, but the fact that steps are done in the direction of acknowledging that online gambling is indeed legal and regulated at the three states should be seen as a positive development.

The hope is that the new codes will help financial institutions to identify regulated transactions and not put them off due to being under "notorious" MCCs.

Effect on Industry

Payment methods are among the most important aspects of an online casino experience, allowing players to start playing, fund their accounts and withdraw their wins. The problematic nature of blocked payment methods in the regulated US market so far has deterred many back and perhaps this initial step might alleviate things.

Still a Long Way to Go

Despite the positivity of the step, ultimately it is still up for banks to decide which transactions they willing to process as they are not obligated by law to do so. While the codes give them more clarity in making a decision, the iGaming laws in US are still problematic – one of the main impediments being the notorious UIGEA.