Why Online Gambling Payment Methods have become so scarce

Did you ever look over the elongated list of online gambling payment options on an operator’s website, and wonder why so few of them were actually available to residents of your country? This is one of the most common complaints from internet gaming enthusiasts, especially those located in Australia, Canada and the United States.

In some cases, an operator may provide a substantial database of online gambling payment methods, but the majority of them are unrecognizable. Not many people would want to process their hard earned money through some company they’ve never even heard of before.

In the US especially, there are lots of websites that boast easy deposits with credit/debit cards (Visa,MasterCard, AmEx, Discover, etc), prepaid cards and bank transfers. But when it comes to making a withdrawal, the only way to get your money is to wait for a check to come in the mail. And even those credit cards deposits tend to get rejected.

Online Gambling = High-Risk Business

Having spent the last few weeks poring over the best casino deposit options for Australian players, I decided to do a little more research into the subject to find out why online gambling payment options are so limited in some countries. What I discovered was that internet-based gambling, like many, many other businesses, are considered too high-risk for many payment processors to deal with.

There are two basic types of processing companies out there. You have those that deal in low-risk management corporations only – the type that are expected to stay in business for years to come and rarely incur chargebacks – and those that specialize in high-risk e-merchant accounts.

Rates Steep For High-Risk E-Merchants

The problem isn’t necessarily that payment processors don’t want to work with high-risk e-merchants. Many of them are perfectly willing to accept their business. However, online gambling operators may pay a steep price to secure that service.

Payment providers will often script unsavory terms and charge high facilitation rates for what they deem to be high-risk accounts. To make matters worse, there are over 100x more unethical processors in the market for every legitimate one you’ll find, which greatly narrows the choices for operators who want to give their members a better selection of online gambling payment methods.

Why Is Online Gambling Considered High-Risk?

The guidelines that payment facilitators follow to determine what constitutes a high-risk business are clearly defined, and at least two of them apply directly to most internet wagering sites. High-risk labels can be put on any business that it located overseas, or offers illegal / grey-market services.

The majority of internet casinos are located offshore, on remote islands like Malta, Gibraltar and Isle of Man, or South American countries with questionable regulatory bodies like Costa Rica and Curacao.

In terms of legality, that’s another issue for residents of countries like Australia, Canada and the US. In Australia, gambling online is perfectly legal for players, but due to ambiguous interactive gaming laws, offshore operators are said to be accessing a “grey market” when accepting Aussies. The exact same label falls upon overseas operators who accept Canadians.

The situation is different in the US, where online gambling is explicitly illegal in most states. There are still a few processors willing to support US-facing operators for deposits, but 99.9% of the time, Americans are left with paper checks as the only viable withdrawal method on an already limited list of online gambling payment options.