Business Week – Just as legal online gambling gets started in the U.S., banks and payment processors are refusing to play.
Credit-card issuers Bank of America Corp., Wells Fargo & Co. and American Express Co., along with EBay Inc.’s PayPal, aren’t allowing the transactions, according to the companies. Delaware and Nevada permit Internet wagering, with New Jersey poised to become the third and biggest state on Nov. 26.
The rejections threaten a nascent business with the potential to reach $7.4 billion in annual revenue in four years, the estimate of researcher H2 Gambling Capital. Some Visa and MasterCard issuers have concerns over potential liability for underage wagering or other violations, according to the American Bankers Association. American Express and PayPal say they don’t process gambling transactions of any kind.
“There are still things that can go wrong even with controls in place,” Steve Kenneally, vice president for regulatory compliance at the Washington-based association, said in an interview. “Does the revenue I get offset the potential downside?”
