Visa and MasterCard Promise Investigation amid Claims of Illegal Gambling Ties
Visa and MasterCard have initiated investigations into allegations that illegal gambling websites have used their payment networks to process transactions. Reports indicate that both companies are scrutinizing claims that unauthorized gambling operators facilitated deposits through their systems without appropriate oversight.
LISTEN TO THIS ARTICLE:The issue came to light following an investigation by Investigate Europe, which found that MasterCard was featured as a payment option on nine gambling and live sports betting websites catering to customers in the UK. Visa was also listed as a payment method on two such sites. The investigation highlighted concerns over the extent to which illegal gambling operators continue to function across Europe, despite regulatory prohibitions.
The findings suggested that both financial institutions may not have sufficiently prevented their networks from being used for transactions linked to illegal gambling. According to The Guardian, these sites continued to accept payments through these major card networks despite restrictions imposed by regulators.
MasterCard responded to the claims by stating that it does not tolerate illegal activity within its payment system. Visa also addressed the matter, reaffirming its commitment to maintaining the integrity of its payment system.
Both companies maintain separate integrity risk program aimed at identifying, preventing, and mitigating non-compliant transactions. These programs are designed to help participants in high-risk industries implement robust oversight mechanisms to detect and block unlawful transactions from accessing the networks.
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Responding to an Evolving Market
The allegations against Visa and MasterCard arise amid broader shifts in the global gambling industry, particularly in the realm of payments. With sports betting gaining legal status across the US in recent years, financial institutions have had to navigate evolving regulatory landscapes to determine how they process gambling-related payments.
Historically, financial institutions were hesitant to approve gambling-related transactions, and issuing banks often blocked such payments even after the legalization of sports betting. Zak Cutler, president of global gaming at Paysafe, previously noted that approval rates for gaming-related transactions remained low even after the industry received regulatory approval in certain jurisdictions.
However, over time, major banks and financial institutions have increasingly acknowledged the legitimacy of online sports betting. This recognition has led to a substantial rise in transaction approval rates. Whereas approval rates were once in the single digits, they now exceed 90% at major banks, reflecting a significant shift in the financial sector's approach to gaming transactions.
Visa and MasterCard's ongoing investigations into the use of their networks for illegal gambling transactions highlight continued challenges in monitoring and enforcing compliance in the digital payments sector. As regulators and payment providers assess their oversight mechanisms, the findings of these inquiries could lead to further scrutiny of how gambling operators process payments across international markets.
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