|June 19th, 2019
Market growth of online gaming, online casinos etc. has skyrocketed in the recent years. By end of 2021, it is expected to clock revenue of approximately $2.2 trillion. But does that make the online sports gambling industry free of legal complications? Unfortunately not. Law and order pertaining to sports betting varies from state to state, making payment processing a high-risk affair for the industry.
Despite the fact that sport gambling is a highly profitable business, merchants do not find buying merchant account services to be a bed of roses. In fact, most of the card processors maintain distance from gambling and sports betting. Merchants running online gambling businesses oftentimes face rejection for their credit card processing services applications by both banks and payment processors.
Blame the notorious industry background and ruined reputation, high chargeback ratio and impending legal matters & sports betting businesses are viewed as high-risk. Sports gambling merchants should not be hiding their business because they need specific type of account that can cater to the needs of their high-risk businesses.
Payment processors once ensured that they are not proffering processing services to businesses that promote any kind of illegal services, bear the responsibility of a high risk business. Since payment processors are held responsible, so many processors simply opt out providing merchant services to high-risk businesses like online gaming. Businesses that fall into the category of high-risk businesses are supposed to make some extra efforts by finding out payment processor of repute that will understand nature of their industry and meet their payment processing requirements without fail.
Going further, it is important to discuss another important reason, which is high charge back ratio that leads to credit card processors lack of interest towards serving gambling and sports betting industry. Buyer’s remorse is not an exception to the sports gambling businesses too. Many customers choose to cancel a service or dispute a transaction half in the mid-way to further complicate things for online casino owners.
A group of payment providers avoid associating with sport betting businesses because they are disinterested or incapable of dealing with the legal complexities. Federal and state laws and regulations regarding sports gambling industry are ambiguous to many credit card processing services, unlike, other businesses with which they are thorough with regulations and laws. As if it was not enough, age restrictions levied on the industry put lines on the forehead of many payment processors.
Rising high from its infancy phase, world of online gaming has begun to flourish owing to the consistent growth of internet and technological advancements. While the industry has grown into a multi-billion-dollar business it is no longer restricted to younger men. In fact, gamers of distinct demographic section are getting attracted to the sports betting universe.
With this, those who are running online gambling businesses are somewhat relieved. Improved outlook of the industry and better availability together make more payment processors open for providing their services to the merchants. Nevertheless, merchants have to still lookout for trusted merchant account services as they need to protect their business from frauds too, besides facilitating best payment processing solutions.
The major difference has been made in the outlook of industry when the Supreme Court ruled in Murphy v. NCAA. It overturned 1992 federal law that prohibited the legalization of sports betting and gambling in states where it was still illegal. Undoubtedly, this move will prove to be determining and in favor of industry but it decision is still new and it will take some time to make difference on the ground level. Also, there are still a set of reasons for which some payment processors may limit themselves from assisting the industry players.
There is no denying that recent Supreme Court ruling will prove to be helpful for the merchants in the sports gambling industry. That said, the barriers will only be reduced and not completely eliminated.
Another thing which goes in favor of the merchants here is that online gamblers will be rising not only in numbers but also in frequency of betting. This in turn will increase the possibilities of more states legalizing the industry. Still, expecting any relaxation on the average costs that will be incurred on setting up merchant accounts shall be considered as surreal. At the same time, merchants have a reason to sigh as some or more merchant account providers will start showing interest in providing them much-needed assistance.
Gambling merchants should be particular about their payment processing needs. Industry-specific card processing services result in better risk mitigation and chargeback prevention.
Online gambling and sports betting industry has immense growth potential which can multiply the number of processors. But it is early to predict the inclination of payment processors. Moreover, not every processor is qualified to take care of highly specialized high-risk payment processing needs.
People at Payrcon are competent enough to understand and handle the high-risk business complications. Our experience and expertise has brought us in position to empower our high-risk clients including the gambling merchants with seamless card processing and a lot more. Contact us now to put an end to all your merchant account concerns.