Gambling has a murky history in the United States whether it is one of any form. Location is the basis of legality as some areas allow it and some did not thus create a challenge for credit card processors.
On Monday – May 14, 2018, it was ruled by the U.S. Supreme Court that the nationwide ban that was made by the Federal Government on sports betting was unconstitutional and it is not the one to decide regarding the legality of sports betting. The 1992 Professional and Amateur Sports Protection Act (PASPA) which has made sports betting illegal was considered invalid. This has been the result of the long battle between New Jersey and the major sports leagues.
What Is PASPA – The Federal Ban on Sports Betting?
PASPA or Professional and Amateur Sports Protection Act also known as the Bradley Act was signed into law in 1992 by President Bush. The bill was originally introduced by Bill Bradley on Feb. 22, 1991, who is a former professional athlete with a 13-year NBA career in his term as a Democratic U.S. Senator.
The bill prevented states from offering legal sports betting and is broken down into four sections described below.
- In the first section, the terms were defined as used in the bill.
- The second section tackles on the unlawfulness for a state to operate or give license for sports betting and gambling that takes place on professional or collegiate sports events.
- The third section gives permission to the U.S. Attorney General or even an athletic league to go to federal court to report and stop any state or entity who is suspected to violate the law.
- The last & fourth section lists gambling exemptions such as lotteries and horse racing.
It was left to the decision per state and each state now can choose whether or not they want to allow this form of gambling. The states can now freely determine on their own whether they see gambling on sports is legal within their own borders. New Jersey has already passed its law and after two weeks of the ruling, some businesses will begin to take a sports bet. The said ruling has opened up the possibility of other states to legalize sports betting soon. There were some projections made that 32 states will legalize sports betting within the next five years that will soon bring the underground sports betting into the light. Some states have shown interest in legalizing sports betting like Delaware, Mississippi, New York, Pennsylvania, and West Virginia and some of these states has already passed legislation and are likely to begin the buildup of the necessary infrastructure for the businesses to start taking bets.
Since there is a move to legalize sports betting across the country gradually, it is just right to expect that there will be more doors that will be opened for businesses that would like to capitalize with the expanding industry and thus also increase the number of online processing options. With this ruling, merchants are collectively excited about the possibilities they have in the sports betting industry.
The future of sports betting still depends on how individual states decide to proceed. It is not difficult to imagine a future where placing bets are as easy as opening an app on your phone. Technology will play a lot in this move to legalized sports betting in America and even in the whole world.
There is one interesting fact about the sports betting industry – it operates much like Wall Street where there are strategies and tactics of professionals and amateurs. Betting your all is not advisable but instead to bet using spreads leaving your portfolio to be diversified.
This sports betting niche falls under the high-risk merchant accounts. Making it not easy for businesses under sports betting to find a reliable processor that can handle the transactions safely and legally. That is why a merchant must think thoroughly as to which payment processor they will get their merchant account.
Credit card giants are not eager to offer credit card payments for sports betting and one the most significant reason for this are the volume of chargeback that may be involved. There are two possible reasons seen that will make the customer ask for the chargeback. One is they will pretend that the one who used their card for online payment wasn’t them as they may feel ashamed or embarrassed to see their massive betting on their statement of account. And second is that the spouse of the cardholder does not recognize the charge when they examine the statement of account thus ask for the chargeback. Payment fraud may also be an issue as well as refunds and out if country sales giving all the reason for the sports betting to be high risk
While the card brands ponder over the possibilities of credit cards for sports betting, hopefully, they’ll have a solution to counter the probable rise in chargeback as a result.
Credit Card Processing For Fantasy Sports Companies
Fantasy Sports Betting has been on the ascent in the US as more people push for its legitimate legalization. Offering every day, month to month and one-time betting alternatives to a large number of eager sports fans, it is anything but difficult to perceive any reason why competition is heating up in the industry. Sadly, simply having a wonderful website and platform for your clients isn’t sufficient to be successful. Collecting payment is the thing that keeps a business running, fantasy sports are a type of betting after all. Most games betting payments are made by means of credit cards so having access to offer this to your clients in extremely vital. Notwithstanding this, really getting a payment processing and Fantasy Sports Betting High-Risk Merchant Account isn’t as simple as it sounds.
Trust it or not, Fantasy Sports is a massive industry and is developing each year netting just under of $26 billion every year. With the greatest players appreciating both popularity and fortune on circuits secured by CBS Sports, ESPN, Fox Sports and more- the fan base has never been greater. more than 118 million Americans reported having placed bets on the results of a fantasy league competition. That is 38% of the population- and evaluations have it that no less than an additional 10% remained unpolled. Since 2008, fantasy sports betting has developed by a normal of 12% consistently. With numbers that way, you would think obtaining secure and reliable fantasy sports payment processing services would be easy.
Getting Approved For Fantasy Sports Processing
IF you are running or thinking about starting up a fantasy sports business, having the capacity to collect payments ought to be the best need. In spite of the fact that, banks are not making this simple. In view of the business and the grey area of its operations, financial institutions are exceptionally suspicious of partnering together with anybody managing these kinds of organizations. Fantasy sports betting is viewed as high-risk by banks. Because of the business alone, as well as a result of the huge transaction volumes and amounts as well as the high number of chargebacks that can happen. This has substantially affected any organizations depending on the capacity to process credit card transactions inside this industry. Most processors will refuse companies hoping to be approved for a fantasy sports merchant account as a result of this high-risk label given by the banks.
iPayTotal knows how the fantasy sports industry functions and how best to get you approved quick. We provide both you and your customers with the best payment alternatives by carefully working with you to make the best high-risk credit card processing solution.
With about half of the populace engaged with fantasy sports betting, you would figure the business would get somewhat more regard from financial institutions and high risk payment processors. Sadly, the accomplishment of your industry presently can’t seem to achieve the ears of enormous industry associations like Visa and Mastercard.
As per them, Fantasy sports betting services are high risk on the grounds that the results depend more on fortunes than they are on skill. At the end of the day, your industry is viewed as high risk since it involves gambling. Nonetheless, there are numerous large casinos both online and brick and mortar that enjoy very secure and robust payment processing services.
That’s why you need a high risk payment processor that access your business with its results. You deserve fantasy sports credit card processing support that does not withhold quality service from legitimate businesses like yours.
What to expect during an underwriter’s merchant account review
An ultimate key to getting fantasy sports betting high risk merchant account is for a business to work for a law-abiding, reliable, reputable company. Questionable business dealings, a defective plan of action, and a past checkered with so many chargebacks will sting any merchant’s chances of getting a high risk merchant account for sports betting.
During their survey, underwriters decide to risk. They take a look at numerous components to guarantee credit card processors won’t be unnecessarily financially burdened by fantasy sports merchants, which are viewed as high risk. At last, they want to know that merchants have a decent business model that won’t result in a high volume of chargebacks and refunds that in the long run turn into the responsibility of processors.
Factors that determine a business’ risk include:
A past filled with high chargeback (credit card transaction disputes) ratios
- Bank statements
- Credit card processing history
- Credit scores
- Negative bank account balances
- Unpaid bills and late payments
Other things that help include having a principal in the business with a decent credit history apply for the account. Merchants ought to also pay any outstanding debts, and have some money in the bank before an underwriter’s assessment. The time before a survey is when organizations need to deal with anything suspicious.
Though no approval is guaranteed, making these strides can build a merchant’s odds of getting a High Risk Merchant Accounts for sports betting approved. Putting business in the most ideal light also may restrain an underwriter’s restrictions, such as higher processing volume caps or a lower rolling reserve.
About High-Risk Merchant Services Solutions
We at IPAYTOTAL do our best to open each business relationship with a 10-minute conversation to find out the key elements of business before going forward. Immediately, we establish a connection with prospective merchant partners and decide then and there whether or not we’re able to find high risk merchant services solutions for them.
We guaranty quick real-time credit card processing, top-notch services and at reasonable rates. Give us a call at +44 800 776 5988 or get in touch with us through our website.