Online casino payments face visa restrictions.
Visa, a prominent credit card company, is reportedly withdrawing from Germany's online casino market due to the operators' illegal status in the country. According to a report from NDR, partner banks have been instructed to cease transactions with unlicensed online casinos in Germany. This action contradicts the planned regulation of the sector in July 2021.
Rising pressures from authorities
A fortnight ago, Germany submitted its gambling novella to Brussels for ratification. In contrast to the federal government's regulatory plans, Visa has made its intention to exit the German online gambling sector known. Partner banks were instructed not to facilitate any more transactions with unlicensed online casinos in the country. Consequently, it is no longer possible to deposit or withdraw funds using the popular credit card.
This announcement was first shared by the NDR. Visa's decision is attributed to the fact that online gambling is still considered illegal in Germany apart from Schleswig-Holstein. The interior ministries of the federal states have expressed disapproval for a long time about the prevalence of online gambling across the nation and the part played by banks and payment service providers in facilitating these transactions.
Following PayPal's withdrawal from the German online gambling market last year, it appears that Visa is also yielding to the pressure from the authorities. In a statement to Handelsblatt, Visa said it expects its partner banks to ensure that only authorized, duly licensed transactions are processed. They threatened, "If Visa discovers that a merchant bank is not adhering to its compliance requirements, we can disconnect or terminate their access to the Visa network."
Intervention by the authorities
The pressure from the authorities has been primarily exerted by the gambling supervision of the Lower Saxony Interior Ministry, which speaks on behalf of the federal states to demand an end to these illegal payments. A confidential meeting was held with 19 payment service providers, where the identities of the companies were not revealed. Nine of these providers have already discontinued payments to online casinos.
Interior Minister Boris Pistorius (SPD) has been particularly vocal against illegal gambling transactions through credit cards in recent months. The banks are supposed to assume responsibility and refrain from processing payments to unlicensed online casino operators. The possibility of illegal gambling persists due to the banks and payment service providers' continued facilitation of deposits and withdrawals.
NDR conducts studies 1
1: The original text implies "NDR führt Stichproben durch" which translates to "NDR conducts surveys" but the context of the article is not clear regarding what these surveys entail.
To gauge the impact of the Lower Saxony Interior Ministry's ban on the burgeoning market, the NDR conducted sample surveys among online casino operators. Large-scale providers have begun eliminating Visa as a payment option. Players found this out when they could no longer transact with Visa on several forums.
However, the results are inconsistent. An operator that continues to allow Visa payments is the bookmaker Bwin. On their website, they state that the card can only be used for sports betting. The renowned bookmaker Tipico has also removed the Visa logo from their casino page. However, an NDR test revealed that Visa could still be used for casino games in these cases.
Visa has been evasive in response to these occurrences. A Bwin spokesperson expressed reluctance to comment on ongoing business relationships with payment service providers. Moreover, the actions of the Lower Saxony Interior Ministry were deemed "in contravention of EU law." Tipico similarly referenced their EU license and emphasized that their online casino is lawful.
Upcoming online gambling regulations from 2021
With the planned regulation of German online gambling from July 2021, these debates could potentially disappear. The much-anticipated Gambling Reform State Treaty aims to license online casinos, online poker, and online sports betting nationally. The rationale behind this liberalization includes enhanced control options, job creation, and enhanced child and youth protection.
Despite the Federal Republic having gained substantial revenues from taxes for years, online gambling has been permitted in Schleswig-Holstein alone up to now. This state had emancipated itself from the constraints of the outdated legal situation in 2011 and issued licenses to serious online gambling providers in 2012. As part of the ongoing legal reform, a new central gambling authority is to be established in Saxony-Anhalt.
The licensing process aims to preserve the utmost player protection standards. These include betting limits of €1,000 per month, early warning and self-exclusion systems, advertising restrictions, and a national excluding register for individuals struggling with gambling addiction. It seems likely that Visa will return to the market in the context of these legal changes.
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Source: www.onlinecasinosdeutschland.com
