Christopher Justice is president of the Gaming Solutions division of Global Payments. A 25-year veteran of the payments industry, Justice recently joined Global Payments, which provides a wide range of services to the gaming industry, both land-based and online. He spoke with GGB Publisher Roger Gros from his offices in Las Vegas in July.
GGB: There still is quite a bit of difficulty in making and receiving payments for online gaming. Why is that?
Justice: In the credit card world, it’s definitely a significant issue. While a financial institution may underwrite a cardholder for a particular credit line, that doesn’t necessarily mean that a bank is willing to stand behind that cardholder when placing a bet. It’s one thing to spend $500 on a purchase at Best Buy, but it’s another entirely to put $5,000 down on your favorite team to win. If you don’t win, the bank might not want to make good on that particular transaction. And banks still have a significant apprehension about being in the gaming market, just due to the reputational risk associated with those transactions.
Isn’t it somewhat odd, since good players have high credit limits and usually pay quickly?
Yes, that’s true. They have good standing within the community, but banks are continuing to restrict their funds.
And that’s where Global Payments comes in from an iGaming, iLottery and sports betting approach. We deal with close to 500 brick-and-mortar and digital casinos all over the U.S. and Canada. And we also deal with every one of the iGaming properties in New Jersey. Depending on the site, we are 40 percent to 60 percent of their actual wallet. We provide that high level of authorization that the players expect when trying to participate in gaming. And the sites need that high approval rate, as well. It all boils down to the company’s longstanding expertise, technology and process.
Why wasn’t the special code created for legal iGaming the answer?
Visa and Mastercard create these “merchant category codes” and adjust them twice a year for market conditions. They did create a code for legal iGaming, and now with the repeal of PASPA they’ve created codes for sports betting. So they’ve got the rules and the infrastructure, but that still doesn’t require a financial institution that is holding all of the risk for the cardholder to actually participate. Even though it exists, it still doesn’t mean the major banks want to participate in iGaming or sports betting.
Tell us how the legalization of sports betting is going to impact online gaming payments.
I don’t think it’s going to do anything to improve approval rates on credit or debit cards. While Visa-Mastercard have created codes and procedures, it doesn’t appear that this is going to change anything that financial institutions have already decided to do.
From the Global Payments perspective, with our VIP program, we’re still providing approval rates exceeding 94 percent across all of the locations we service. We’re still providing the stability of an $18 billion company standing behind and underwriting the players.
Even though Nevada allows mobile sports betting, you still have to go to a casino or bar to make a deposit or collect winnings. Will that change?
I would certainly hope so. A lot of the reason those problems exist is because of regulatory constraints. I wonder now that sports betting is going to go nationwide whether with the added competition, Nevada regulators get together to see how they create frictionless commerce. If I can buy a bag of dog food on Amazon and have an Uber driver deliver it within four hours, I should be able to fund my wallet to make a sports bet in a similar manner.