Less than a month after Paysafe Group Holdings Ltd. announced processing online gambling transactions will become a primary focus for the company, the strategy is quickly paying dividends as the processor has expanded its relationship with Golden Nugget Online Gaming Inc. to Michigan.
The deal is an outgrowth of online-gambling operators setting up shop in multiple states where wagering online has been legalized. Paysafe has processed transactions for Golden Nugget in New Jersey since November 2013, when online iGaming launched in that state.
“Golden Nugget, which is one of the top online casinos in New Jersey, is very focused on the casino side of the iGaming industry and we expect they will target any state that is offering online gambling,” says Gregory Kirstein, vice president of business development, igaming, for Paysafe. “The [transaction volume] in Michigan so far has been exceptional and is a good reflection of pent-up demand in that market.”
Paysafe’s platform will allow online gamblers in Michigan to fund their account using credit and debit cards, as well as bank accounts through the automated clearinghouse. To enable ACH transactions, Paysafe will connect Golden Nugget’s platform to Global Payments Gaming Solutions’ warranty ACH service. Gamblers can use the funds to play video slots and place bets for table games, video poker, and live dealer games.
Online gambling in the United States totaled more than $1.9 billion in 2020 and is projected to grow more than 17% annually between 2021 and 2026, according to Mordor Intelligence, an India-based market-intelligence and consulting firm. New Jersey is the largest online gambling market in the United States with more than a dozen online casino sites and poker rooms generating more than $225 million a year in volume, Mordor says. The state surpassed the $1 billion cumulative lifetime mark in volume in 2019.
“Michigan’s model for iGaming is similar to that of New Jersey’s in that online gaming operators can sell multiple products, such as online casinos and sports betting, which provides [gambling] operators like Golden Nugget and [processors] such as Paysafe a good operating environment,” says Kirstein.
Gamblers can expect to see winnings deposited to their bank accounts in two to five days for ACH-based transactions. Winnings can be pushed to debit cards in real time using Visa Direct, which allows businesses to move money to billions of endpoints worldwide via card and account rails. Paysafe can also deposit winnings immediately into its Skrill mobile wallet.
While the longer time it takes to deposit winnings to gamblers’ accounts using the ACH creates a point of friction, Kirstein expects that speed bump should be smoothed out as real-time payments reach critical mass.
Looking ahead, Kirstein says Paysafe’s pedigree in processing lottery and sports-betting transactions in Canada and outside the United States has positioned the company to become a key player in iGaming processing as more states move to legalize online wagering. “We were an early player in this industry and have deep roots in it,” Kirstein says.