Visa Joins Mastercard In Banning U.S. Gaming Transactions

Visa has become the latest credit card company that has banned the use of its card for the purposes of funding online gambling accounts. The "ban" applies to American players; reportedly the international sector, at least in those jurisdictions where online gambling is legal, is not affected.

Of course, the rationale behind this revolves around the cloud that looks over the industry because of the UIGEA (Unlawful Internet Gaming Enforcement Act). Visa is not jumping the gun necessarily, but they are merely putting the mechanism in place in anticipation of the UIGEA taking effect, which is on track for June 1 of this year.

In this action, Visa actually follows MasterCard, which had previously taken steps to prevent its card from being used. Their decision probably has more impact, because Visa is actually the biggest credit card issuer in the United States. Like MasterCard, Visa puts itself into the category of "financial institution" that is covered by the UIGEA.

So how will Visa affect this ban? Well, for one thing, they will uniformly refuse any and all transactions coming from a United States customer that use the code that is specific to internet gaming e-commerce

Many players who attempted to use Visa to make gaming-related transactions were sent this message:

"Status: DECLINED.

Your credit card transaction has been declined. If your credit card information was entered correctly and you have sufficient funds, your transaction was probably declined due to Internet gaming restrictions set by your credit card issuer."

The most prominent credit card issuers include companies like Bank of America, Capital One, MBNA, Providian, Citibank, and Chase.

Of course, Visa fully recognizes that there have been gaming operators who have not coded the transactions they make with customers as "7995," which is the code set aside for internet gambling, but have instead used another code and will continue to do so in the future.

Visa has also determined that it will be a violation of its rules to have third parties funding accounts using its card. What that means, principally, is that electronic wallets (Click2Pay and UseMyWallet are a couple of examples) which have in the past used Visa cards as a conduit to fund gaming accounts would not be able to do so.

Let's face it - Visa most likely turned a blind eye to many of the internet gaming transactions because it meant revenue to them, and a lot of it. However, with the UIGEA on the horizon, it was the rationale of the company that it could not continue to process that kind of business.

As is well-known by now, Barney Frank, the Congressman from Massachusetts, has been lobbying to get the UIGEA repealed in favor of different legislation that would call for the legalization and regulation of certain forms of online gaming, including online casinos. He had been successful in getting the implementation of the UIGEA delayed from December to June, and he is trying to obtain another delay in order to buy time to gain support for his proposed bill, although with each passing day it looks like there is less of a chance for that to happen.

Apparently it means nothing to the credit card companies that they might lose millions of dollars by disqualifying themselves from gaming-related transactions.