Payment Vendors Line Up to Serve Gamblers As States Okay Online Gaming

By Kevin Woodward

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Online commerce has hit a trifecta of sorts. New Jersey on Tuesday became the third state, in addition to Nevada and Delaware, to allow some forms of online gaming. And with its debut, more payments companies are at work on providing services to gaming operators and their users.

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Passage in 2006 of the federal Unlawful Internet Gambling Enforcement Act banned banks and processors from handling online-gaming transactions. That law drove online-wager processing offshore and forced a number of U.S. acquirers to quit the business. A major turning point came in December 2011, when the U.S. Department of Justice released a memo in which the agency interpreted the 1961 Wire Act to apply only to online sports betting. This interpretation, which came in response to states looking to sell lottery tickets online, appeared to clear the way for online poker and other games, as well.

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Registered New Jersey online gaming operators include Borgata Hotel Casino & Spa, Golden Nugget Atlantic City, Trump Plaza, Trump Taj Mahal, Tropicana Casino and Resort, and two affiliates of Caesars Interactive Entertainment New Jersey.

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The New Jersey Division of Gaming Enforcement, which has regulatory oversight for online gaming, lists several payments companies registered to work with operators and gaming users in the state.

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Skrill USA is one of them. A unit of United Kingdom-based Skrill (formerly Moneybookers), Skrill USA provides a mobile-wallet service for gamers, says Neil Steinhardt, Skrill USA chief executive. New Jersey is the first market for the company, but it plans to offer services in Nevada and Delaware, he says.

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Mobile wallets used for online gaming provide a way for users to transfer money between their online-gaming accounts and the funding accounts.

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Steinhardt says consumers pay nothing to move funds via the automated clearing house to their Skrill accounts, but pay 2.9% if using a branded payment card. Withdrawals from a Skrill account are free.

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Neutered in the United States, payment-provider expertise for online-gaming developed more fully in Europe Steinhardt says. With the return of U.S. online gaming, companies like Skrill see opportunity here, he says. “If you look to Europe as a model, customers like to bring in control of their own funds and like to work with established operators,” Steinhardt says.