A new Visa rule has some in the sports betting industry concerned. The new policy will roll out on January 1, 2021, and at first, could create issues for sports betting fans placing bets.
However, in the long term, there could be some succinct benefits for the sports betting industry. Starting in the new year, Visa will label payments going to gaming transactions, such as sports betting, to general-purpose reloadable cards (GPR). These payments directed to certain wallets will be given a specific code, ‘7801,’ and these coded payments could be flagged by certain banks, like Bank of America.
These new changes are part of the Federal Wire Act that has been a thorn in the side of gaming for decades. Payment analysts Jerry Rau with the firm of Eilers & Krejcik weighed in on the law Visa rule.
Sports Betting Providers Could Pay 10 %
According to Jerry Rau, the new Visa rule could mean an instant 10% tacked on to every sports betting transaction that the sportsbook will pay. Some people involved in the sports betting industry wonder if this new rule will be a temporary issue or present problems long term. Rau believes “that this is a very temporary issue, and will only cause minimal disruptions of operations.”
If any payments are rejected, the player would see a code that offers alternative payment options. Some experts are saying this new Visa rule is an attempt to have full transparency and know which payments are being used during gambling transactions.
The CEO of Straightline Payments, Joe Pappano, shared his position on the new Visa rule. Pappano said, “right out of the gate, the new Visa rule will create confusion and some problems.” The CEO added, “This change will inform banks’ rules engines, so they know what to do with these transactions. Visa is heavily engaged with the sports betting industry, and hopefully, more issuers are coming on board.”
Pappano didn’t mince his words when he said, “Bank of America, Capital One, and Chase have not warmly embraced anything to do with legalized gambling.” Pappano added: “that out of those banks Chase, has recently elected to accept debit card transactions for sports betting and other gaming transactions.”
Sportsbooks Are Hopeful The Change Will Be Good
Pappano also revealed “that there is a good chance that Bank of America will follow suit, and allow debit card transactions for sports betting and other gaming in the first quarter of 2021.”
Pappano said, “this could be a huge sign that what is on the horizon is that more and more mainstream paying sources will accept gaming payments from outlets across the US.”
Sportsbooks across the US are very optimistic that this. However, it may be looked upon as a bad thing; in the end, it will be a huge advantage for the sports betting industry, as more and more traditional banking institutions except for gaming payments. Bank of America and Chase are expected to allow their credit cards also to be used for sports betting and other gaming transactions in 2021.