MasterCard Refuses Deposits at Online Casinos
The recently proposed laws, designed to cut the cash supply for online casinos, target credit cards. MasterCard’s online gambling restrictions have been increased for US citizens trying to make deposits at online casinos.
The legality of online gambling has been debated for a long time. The act of making a deposit at an online casino may be covered by the Federal Wire Act of 1961. The Federal Wire Act was created to outlaw the use of telephones for the purpose of placing bets. The phone had allowed people who lived in areas where gambling was illegal to start playing in areas where gambling was legal. Online gambling deposits must be encrypted with a sic code 7995 in order to be identified. Many online casino operators use designated sic codes for other online purchases to prevent deposits from being declined. MasterCard transactions using the correct and incorrect sic codes started to be declined at an unprecedented rate. The lawsuit sends a signal that MasterCard is preparing to apply the Internet Illegal Enforcement Act in America (UIGEA). This act was designed to ban the facilitation of online gambling by the banking industry.
Congress has tried unsuccessfully to stop playing on the Internet in the past best betting sites. Taxing online gambling is extremely difficult. Congress sees online gambling as a loss of income. while voters see it as a personal choice. This made it difficult to pass the legislation. In 2006, UIGEA was presented as an annex to an Internal Security law.
Online casinos operate outside the jurisdiction of the U.S. government, so it will be difficult to enforce UIGEA. In reality, UIGEA could only be applied in the most serious cases. It would be impossible to investigate all suspicious transactions. The real success of UIGEA will be to create financial barriers for new online casinos and make it difficult for online casinos to accept deposits. Finally, new businesses will emerge that will “wash” deposits, acting as intermediaries.
The long-term prospects for the online casino industry are likely to be on debit cards. Currently, you are more likely to complete an online gambling transaction using a debit card than a credit card. This is because the use of credit is essentially to borrow money to play at a bank. With a debit card, you are removing your own money from your bank account. This reduces banks’ exposure. Prepaid debit cards are financed in advance and can only be used for the amount that was financed.
Many experts have begun to believe that credit cards would disappear as a way to finance online gambling transactions, as they believe the solution lies in some type of debit card. Currently, the chances of completing a gambling transaction with a debit card are better than with a credit card. This is because using a credit card is equivalent to borrowing money from the issuing bank. With a debit card, money is instantly withdrawn from your account. This, in turn, reduces the risk for the website and the bank. At the moment, the only legislation passed against online casinos operating outside the United States is in the banking sector. Online gambling has not been banned.