Visa Dismisses Talk of New Crackdown on I-Gaming

20 November 2002

Visa U.S.A has confirmed to IGN that it has instituted new regulations for high-risk merchants, but that the measures will not affect online gambling vendors.

The new regulations became effective last Friday and entail Visa charging its member banks a $500 registration fee and annual $250 fee for every high-risk merchant they process for. Casey Watson, a spokeswoman for Visa, said those charges will only apply to online sellers of adult entertainment.

"There have been allegations that we're trying to shut down the online gambling business, and that is not the case."
- Casey Watson

Watson said the new regulations have been the source of misunderstanding.

"Some writers are, unfortunately, linking the high-risk registration program to online gambling," she said. "We did several years ago introduce a requirement that all online gambling merchants worldwide identify themselves as such."

That requirement was put in place to give Visa's member banks more knowledge about the types of purchases being made, so they can decide whether to allow the processing of transactions.

"It was important that banks, in particular the issuers of the cards that were being used for gambling, decide whether they wanted to approve or decline those transactions based on whether Internet gambling was in fact legal or illegal in their jurisdiction," Watson said. "We do not allow Visa cardholders to use their cards for illegal purposes, nor do we allow our 21,000 member institutions around the world to process illegal transactions."

Watson continued by saying that despite what many people are saying, Visa is not on a rampage to put an end to its cards being used to pay for online gambling activities.

"There have been allegations that we're trying to shut down the online gambling business, and that is not the case," she said. "We do process online gambling transactions today, and we're simply trying to help our membership do the right thing, obviously, and follow the letter of the law."

One industry analyst, who did not want to be named, said that after combing through the new regulations, he could not find any instance in which they might affect online gambling companies. The specific merchant category codes mentioned, he said, were for adult entertainment and not I-gaming.

In a statement, Visa noted that the new regulations represent an effort to keep chargebacks and fraud at "acceptable" levels.

Anne Lindner can be reached at