While internet poker has now been legalized in Nevada, New Jersey, and Delaware in the US, some financial institutions in those states still refuse to process payments related to the industry.

The wariness of banks to associate themselves with online gambling comes as no surprise. In 2006, the US Government passed the Unlawful Internet Gambling Enforcement Act, legislation that prohibits banks from doing business with illegal gaming sites.

“Considering the changes that were required of banks, as well as the increased risk exposure due to UIEGEA in 2006, and the fallout of the poker Black Friday indictments in 2011, it’s understandable that banks have been cautious about accepting iGaming transactions,” said Caesars’ Head of Online Poker Bill Rini to the Las Vegas Business Press.

That unwillingness to participate in the industry has led banks to reject player deposits and has stymied the growth of regulated online poker in the US. To counter the idea that some online gambling sites are still not completely legal, Rini and his counterparts have been meeting with processors, credit card issuers, and banks to explain the new realities of the industry.

Even so, Rini says that informing financial institutions about geolocation and fraud controls has not been an easy task. “We’re optimistic that things will only improve over time,” he said.

Online gambling operators hope that the recent addition of three new merchant category codeswill help streamline the process of transferring player funds via credit card. Codes have been created for state-run online lotteries, state-run online casino games, and state-run racing. Those categories will stand apart from code 7995, which will now be associated with unregulated iGaming transactions.

Rini says that the new codes have led to more successful deposits on average, but highlights that more work needs to be done to reduce high decline rates. “It removes a barrier, but it’s not like a light switch that was suddenly turned on,” he said. “We have seen an uptick in acceptance rates since the new code was introduced, so things appear to be moving in a positive direction.”

Of course, financial institutions are not required by law to process iGaming transactions, no matter how illegal they are. While some banks don’t understand the legalities of the industry, some simply don’t want to be associated with online gambling.

But for many, the fear of not complying with the UIGEA is still deeply engrained. “Visa’s new merchant category codes don’t impact our need to continue to comply with [the UIGEA],” said Wells Fargo in a statement. “While we assess the new codes, we will continue to block online Visa credit card transactions from online casinos, racetracks, and lotteries.”

Matthew Katz, CEO of the player verification firm CAMS LLC, sees the new codes as a step forward, but doubts their ability to change the mindset of wary bank executives. “They are not used to this level of visibility,” he said. “There is also a risk of damaging their brand from taking these bets.”

Katz added that the market needs to grow much larger before banks start seeing the advantages of becoming involved. “There’s really not enough revenue for banks to start accepting these transactions,” he said.

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