Boyd Gaming posted its 1Q14 results today and Borgata racked up a $3 million operating loss due to the rollout of Internet gambling. That number might be smaller if credit card companies weren’t throttling payment-processing on the games. The average amount of successful transactions runs between 42% and 46%. Not even favorable guidance from the U.S. Department of Justice has eased the steely resistance of credit card companies. At the high end of that spectrum is MasterCard, with a 73% approval rate. (Visa, not so much.) American Express and Discover won’t process any I-gaming transactions, in part because they don’t want to find themselves playing the casino’s role of running down dishonored wagers. “American Express does not do business with high-risk industries and we prohibit the use of the card for any gambling services,” said a grim company spokesman. (Illinois online lotteries and Nevada Internet poker are running into similar walls.)
New Jersey Deputy Attorney General Mary Jo Flaherty has the unenviable task of trying to get credit card firms to make peace with Internet gambling. She says she “continues to work directly with financial institutions, banks and credit card companies and relevant regulators and authorities with respect to the legality of online gaming where authorized as in New Jersey, as well as regarding the appropriateness of payment processing for legalized online gaming.”
In the meantime, players are trying e-payment services like Neteller and having a somewhat higher rate of success, but not exceptionally so. Those who wish ill upon the I-gaming industry in the U.S. may have nothing to fear. The infant industry may strangle on its umbilical cord.
