Need to know: schadenfreude, credit cards and casinos
On credit cards, why European hand-rubbing was short lived and a mysterious feeling of de ja vue in France...
AS YOU’RE probably aware, this month saw a wave of panic in the US as credit card giants MasterCard and Visa staged a crackdown on cards from their US customer bases being used on egaming sites.
The move came ahead of the implementation of America’s Unlawful Internet Gaming Enforcement Act (UIGEA) this summer, which prevents banks and other payment companies from processing payment to online gambling sites.
Seeking to prevent online gambling payments is not new for either company, of course, with both having long held policies designed to allow cardholders’ issuing banks to turn down transactions in accordance with local law, via a ‘code’ system which tells issuing banks what kind of payment is being processed.
What was new is the card companies’ focus on preventing operators from re-coding ‘7995’ egaming transactions as other forms of commerce “ a practice that has enabled many online gamblers in America (and other countries where egaming is illegal) to continue using their credit cards unfettered.
The crackdown on re-coding was an unpleasant shock for US-facing operators, and will no doubt have been greeted with schadenfreude by operators such as 888, Bwin, PartyGaming and Sportingbet, who ditched their highly lucrative US operations when UIGEA was voted through.
However with US-facing operators still left with a range of other payment options to choose from, the crackdown will have been seen primarily as a marketing challenge, with operators rushing to re-assure US-based customers that there are alternative ways of pay and play before they look elsewhere.
Either way, any satisfaction was short-lived at 888, Bwin and Sportingbet, who with Unibet were soon distracted by a law suit against them from a group of French casinos that alleges that offering casino games contravenes both the current and gaming legislation, and are seeking to have their licences delayed by two years as punishment.
Sound familiar? Yes, this sounds not unlike the player account shut-down scheme dropped last month, but in different form. And for two years, not six months.
Anyway, the case will also set an important precedent in that three of the four defendants, Bwin, Sportingbet and Unibet, argue that French courts have no jurisdiction over them simply because they have French language sections on their overseas-located sites.
And our legal bloggers from the law firms Berwin Leighton Paisner, Harris Hagan and Olswang have plenty to say on the topic…
———————
In other news this week: 188Bet is launching a mobile product; PartyGaming‘s Foxy is launching in Sweden and TV gaming business Netplay TV is launching on yer wee telly. Oh, and we’re on Twitter.