Despite a pro-online casino state ruling in 2013 for New Jersey, Delaware, and Nevada, banks and financial institutions remain reluctant in processing the payments from online casino and poker games. Bitcoin casinos like Fortune Jack for example, are moving forward and successfully. However, complex regulatory, compliance-related issues, geolocation limitations, and logistical problems finally superated all except the payment process. The industry thus hit a brick wall.
Why are banks and financial institutions unwilling to play ball? One of the most lucrative industries in the US was put on hold because of big banks such as Wells Fargo, American Express, and J.P. Morgan Chase. Each sought to antagonize online casinos by refusing deposits and withdrawals for online gambling activity. This was not done for ethical or moral reasons either. Instead, financial. These banks do not want to risk losses from legal disputes now and in the future.
Steve O’Halloran, director of public affairs and relations at Chase Card & Merchant Services, undoubtedly declared: “We don’t allow credit card transaction for this activity.” Similar trenchantly affirmations came from multiple big banks, American Express included, clearly stating that they refuse to allow online gambling transaction withing their banks.
The main reason for not allowing said transactions seems to be the Unlawful Internet Gambling Enforcement Act (UIGEA) of 2016 which prevents all US financial entities from processing online casino funds. UIGEA is a Federal regulation and applies to all 50 states. This regulation cited as a pretext by most US banks contradicts the pro-casino ruling of 2013 legalizing online poker and casinos.
It’s true that since 2013, greater financial liberalization happened regarding online gambling transactions, but the UIGEA remains intact. Banks are rejecting, restricting, or even freezing banks accounts under the pretext of UIGEA. Some banks more than others but it’s still an uncertainty most players are not ready to accept, undermining the economic potential of the online gambling industry, demonstrated by online casino websites with years of experience and thousands of clients. Some casinos are dealing with this matter urgently because of their reliance on trading cryptocurrency, like bitcoin. Such is the case with online casinos like 7BitCasino.com.
Online Casinos are the Future of Gaming
Online casinos are evolving fast. It was only a few years ago illegal bank transfers across the US happened. This included off-shore account transfers and third party shell companies. The FBI is working diligently to crack down, even seizing as much as $21 million in 2015 from Thames Point Management. Strangely enough, no criminal charges or indictments have been filed over the case as there were gamblers using the sites, legally. An official letter was sent to Thames Point, but prosecutors didn’t hear back. The only thing that Thames Point issued was a default judgment for the government. Police also found that Thames Point was not encrypting customer information on their still-functioning website. And this is what scares the banks, losing money without warning.
But none of this has stopped the online bitcoin casino business from thriving. In fact, it is estimated that online gambling will generate more than $7.4 billion in 2017. Nothing is certain for any industry and if the banks continue to run, this industry may fall too. Nonetheless, it is growing.
Banks are simply making it more difficult to withdraw. MasterCard Inc. and Visa Inc. allow transactions to be processed in the networks where states allow online gaming. Spokesperson Rosetta Jones of Visa declared: “Visa has updated its procedures to code newly legalized Internet gambling transaction so that financial institutions can identify and process them in states where they are allowed…” To give an example, a player in an unregulated state may accidentally access a New Jersey-based online casinos and then refuse to honor his or hers debts. The system has been improved since then, allowing access only from regulated states.
Another exciting development in the online casino industry involving traditional fiat currency consists of land-based partners. The player has to go to a physical casino and make a deposit using Visa, MasterCard, Paypal, American Express, Skrill etc. The funds will then be available for online usage. This way, legal problems are gone but severely limits the industry as you’ll have to travel in-person to a land casino and make the transaction only to go home and play on your computer. If you’re miles away from a land-based casino this option is completely unfeasible. Will this feature be open for bitcoin transfers soon enough? We do not know but a trustworthy online casino, like Betchan.com would be thrilled to have such be the case.
Bitcoin Casinos May Be Right
Although online casinos offer increasingly diverse methods of payment, cryptocurrency seems to be the preferred alternative to other fiat currency. Cryptocurrency is an almost perfect currency for online casinos because of its unregulated, decentralized nature, allowing players to input/output their funds in complete anonymity. With zero transaction fees, no currency exchange rates, and fast transfer, Bitcoin is leading in casino/player preference and some of the online casino sites, such as Limoplay. These sites are developing a large fan base. Most of them are loyal gamblers for years and never had problems with deposits or withdraws.
So if banks continue to cause problems for gamblers and refuse to open their payment processing systems for bitcoin and the like, then maybe the gamblers will stick with bitcoin casinos. It is certainly the safest route at the moment, and the one with the most financial protection.