Lesniak Pushing For Internet Gambling Payment Processing Regulation

Senator Ray Lesniak is in agreement with the many United States pro-online gambling analysts regarding payment processing of Internet gambling deposits. The 2006 Unlawful Internet Gambling Enforcement Act (UIGEA) attacks primarily Internet gambling payment transactions. The law states that it is unlawful for US-based companies to handle real money transactions over the Internet which take place with the intent to use that money for Web gambling. This led to the shutdown of the three largest US Internet poker sites in 2011, and a significant departure from the Internet gambling scene by many legitimate payment processors and other US companies. Legally licensed offshore operators have fortunately filled the void, but legislators like Lesniak would prefer to see US money stay at home.

What he told a panel of US Internet gambling analysts and state legislators from across the nation on Monday, March 24 at the Atlantic City Convention Center was simply this: standards must be raised for companies processing online gambling payments, as this would encourage banks and other financial institutions to accept more deposits. Not only in New Jersey Internet gambling which is already legalized and regulated, but in the states that also join the industry in the future, this could add millions if not billions of dollars in revenue when traditional payment processors like credit card companies begin to allow their products to be used for Web gambling funding.

There are currently three states, Nevada, New Jersey and Delaware, legally offering Internet gambling in the United States. Nevada offers Internet poker only, while NJ and Delaware deliver a full slate of casino games as well as poker. But there are an additional 10 states pushing for passage of some type of online wagering in 2014 or 2015. And there are currently two pieces of significant legislation at the federal level which propose nationwide web gambling in the United States. The speech that the Garden State Senator gave during the iGaming conference was offered in the hopes that New Jersey would pass a bill which would allow foreign Internet gambling companies to partner up with NJ. That state bill is currently awaiting approval or rejection, and includes payment processing provisions.

Lesniak went on to say that a system needs to be in place to train payment processors for Web gambling transactions. Chris Thom is the chairman of Secure Trading Incorporated, and he told a New Jersey state Senate committee that you can accomplish effective training and regulation of Internet payment processors by funneling them through the current Internet gaming licensing process, which is already in place in the states which allow web gambling. Currently, state law requires much less certification and regulation for payment processors. This has led to problems with illegal Internet gambling payments, which has in turn caused many major credit card companies to simply deny any transaction which is funding online wagering. This is the case even in those states like Delaware, New Jersey and Nevada where it has been legalized.

New Jersey has surged to the forefront of the fledgling United States Internet gambling industry. And though the early figures show that $10 million in state revenue was taken in by New Jersey in the month of February, that number could be higher. Due in part to difficulties with credit card companies and banks not honoring legal Internet gambling transactions, this Garden State bill could significantly grow state gambling revenue. Currently only 10% to 15% of Visa card transactions attempting to fund New Jersey, Delaware and Nevada Internet gambling activity are approved, meaning there is a lot of money being left on the virtual casino or poker table. And as California, Philadelphia and other states begin to legally offer real money United States gambling online options for their residents and visitors, credit card companies and banks may not be able to pass up the revenue which processing web gambling transactions offer.