To say the least, the US is warming to all things sports betting, but credit card merchant accounts for such will be virtually non-existent until issuing banks can collaborate and establish a framework. Until that happens – we believe it will take a few years at the very least – the US sports betting market is wide open for payment solutions to capitalize.
We believe that there are four solutions that are ideal for sports betting that can step forward and offer bettors an easy, somewhat seamless option.
First things first: Why, all the sudden, are states legalizing sports betting?
There is a simple answer: additional state revenue.
Politicians and state officials have and will continue to do their best to glamorize and even justify the decision to legalize sports betting. We laughed several years ago when officials from all the professional sports leagues denounced all references to fantasy sports as gambling, instead professing it as skill. Claims by pols that consumers deserve the freedom to ‘decide for themselves whether to make a bet on a game’ made us chuckle too.
But really, it’s about new revenue streams for each state.
The best explanation that we read was from a state official in Mississippi, which recently legalized sports betting: Consumers will place bets anyway. States are missing out. Not legalizing sports betting is turning away revenue.
We agree. As a result, with credit card merchant accounts elusive, the following four payment methods will have a massive increase in use:
1. E-wallets and mobile wallets
The growth of electronic and mobile wallets has been stagnant, with only niche industries and brands such as Dunkin Donuts and Starbucks able to fully capitalize. While direct credit card payments for sports betting aren’t an option, e-wallets are the next best thing: Bettors funding their accounts and using their e-wallets to place bets.
2. Gift card payments
We’ve recently come into a solution that we feel is ideal for sports betting, online gambling and many other industries – gift card payments. Through a partnership, we can enable merchants to allow payments via a gift card – Amazon, Apple Store or even Target or Walmart – done through importing and placing a simple widget on a merchant’s checkout page. The benefits, including anonymity, are many.
3. Cryptocurrency payments
Cryptocurrencies such as bitcoin (BTC $6,389) are natural, practical solutions for sports betting and online gambling. The challenge, even with bitcoin’s massive increases late last year, remains consumer adoption; getting consumers to use it and understand its benefits.
4. More custom in-house solutions
Similar to e-wallets, this is a method we feel we’re going to see most sports books adapt.
The New York Racing Association (NYRA) allows horse racing enthusiasts to open and fund online accounts through Visa and MasterCard cash advances. NYRA indicates on its funding page that some issuers have caps on cash advances and may charge a cash advance fee. Commendably, NYRA also encourages account holders to contact their credit card issuers for the details in using their credit cards to fund their accounts, which has caveats:
- The most a bettor can fund their account is $1,000 per day and for a single transaction.
- The most a bettor can fund is an aggregate limit of $3,000 in any seven-day period, and $5,000 in any calendar month.
- Bettors who fund their accounts have a $50 minimum per transaction.
Credit card merchant accounts for sports betting
When Instabill established itself as credit card merchant account provider for e-commerce industries in 2001, online gambling in the UK, Europe and the Caribbean was one of its charter industries. We expect the time will come when US consumers can again gamble online or place bets on sports directly with a credit card. When that time comes, Instabill will be well prepared to offer merchants the best acquiring banking partners and proven solutions.
For online gambling merchants in legal jurisdictions, Instabill offers live, one-on-one customer support and custom merchant accounts at 1-800-530-2444.