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What Makes Online Gambling a High-Risk Merchant Account
Finding a High-Risk Payment Processor or Merchant Account
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September 9, 2020Online gambling is a popular business industry and is growing in recent months with restrictions to in-person business due to COVID-19. Many casinos now include online gambling as part of the services they offer. Many other types of online gaming are considered gambling in certain states, including poker, fantasy football, and sports betting. When it comes to payment processing, all online gaming merchant accounts are deemed high-risk by processing companies. This leads to higher processing rates and additional hurdles when applying for a merchant account.
Why is Online Gambling Considered High Risk?
The online gambling industry is deemed high-risk due to its complicated legal status. Online gambling was not legal anywhere in the United States until 2012, when Delaware passed the Delaware Gaming Competitiveness Act. Other states soon followed, and the federal opinion on legal online gambling changed recently with the new revised Wire Act in 2019. Most payment processing companies avoid industries that are newly legal, regardless of the product or service.
Additionally, online gambling is still illegal in many states, and different states have different laws on what type of online games are legal. Only 12 states have legalized any form of online gambling. Online casino, online poker, and online sports betting are all legal in New Jersey, Pennsylvania, and West Virginia. The other states only have one or two gambling types legalized. This makes it extremely difficult to enforce online gambling laws, which is why payment processors face increased liability. It is also difficult to enforce age restrictions with an online service.
Compared to more mundane products and services, online gambling has a high risk of chargebacks and refunds. People are more likely to change their minds on a purchase, and the processing company has to take on that liability. There is also always a higher risk associated with card-not-present transactions compared to physically scanning credit cards, which means an industry based entirely online is going to be considered an increased risk to processors.
How Double Helix Can Help
High-risk industries often face multiple challenges when it comes to payment processing. Many companies will simply deny service to businesses related to online gaming or gambling. Other companies will charge higher rates and extra fees compared to low-risk industries, and will have strict limitations on acceptable transaction types, payment gateways, and even extensive holds on payment. High-risk industries also face harsh consequences for chargebacks, such as being dropped on short notice and unable to continue accepting transactions. The best option for businesses in online gambling is a payment processor that specializes in high-risk merchant accounts, like Double Helix.
Double Helix offers secure and reliable payment processing to high-risk businesses such as online casinos and gaming services. We are prepared to accept the liability that comes with high chargeback rates with flat, transparent prices. We also work with you to create a payment processing plan that is suited to your business, and you can tailor our services any time. Stop risking an unwarranted shutdown at the mercy of your processor; choose a processing company that specializes in high-risk merchant accounts.