Citibank announced June 14 that it would ban the use of its credit cards for Internet gambling transactions. One gaming operator, however, said Citibank's enforcement of such bans in the past has been inconsistent.
The operator, who spoke on the condition of anonymity, said that in the summer of 2001, Citibank started blocking his Internet gambling transactions. Shortly thereafter, the operator said, the credit card company reversed its position and started accepting the transactions again. He said it was as if Citibank was a little uncertain about the policy.
Credit card industry expert Stephen Fein said the problem was probably based on the cards' BINs, or bank identification numbers. The BIN identifies what bank the card belongs to and what type of card product it is, such as whether it is a gold card or platinum card. Fein said what probably happened is that when Citibank in 2001 decided to halt gaming transactions, not all the BINs were included all at once.
"What I think might have happened is inadvertently some of the portfolios just weren't blocked," Fein said. "They didn't make this huge corporate decision to start taking gaming transactions."
Fein cautioned that that is only his opinion of what probably happened.
"And I bet you they went back and charged back all those transactions (that were approved)," he said.
The operator, who also mentioned that BINs were probably to blame for the inconsistency, said that before the latest Citibank ban, between 5 and 10 percent of his transactions were through Citibank. When asked whether the bulk of customers paid with credit cards, he said that while it varies among operators, many Internet gaming companies are verging away from credit card processing.
"I'm sure other folks out there didn't get hit as much because they didn't depend on credit cards so much," he said.
Another I-gaming operator, however, said he did not experience any lapses in Citibank's ban on Internet gambling transactions. Mark Blandford, executive vice chairman of Sportingbet plc, said his company as well as others located in the United Kingdom are somewhat insulated from credit card transaction problems because they do business in a regulated environment.
"I wouldn't want to go into details of our individual relationships with certain banks, suffice it to say... some of these banks that use 7995 (the Internet gambling transaction code) as an excuse to not deal with people who they're not 100 percent comfortable with," he said.