Online Gambling Law Already Causing Financial Screw-Ups

Opponents of the problematic law had said that asking financial institutions to identify which online gambling transactions were illegal could result in many legitimate payments being blocked.

The UIGEA only finished its review period Monday, and yet the law banning payment transactions to online casinos is already malfunctioning, as experts predicted it would. According to a report on the UnionLeader.com, sales of tickets for the New Hampshire state lottery on the Internet have erroneously been blocked by credit card companies.

Opponents of the problematic law had said that asking financial institutions to identify which online gambling transactions were illegal could result in many legitimate payments being blocked. Now, just hours into the implementation of the controversial bill, both credit and debit cards are rejecting purchases on NHLottery.com, a site owned by New Hampshire.

Lottery Executive Director Rick Wisler said, "We could end up losing some significant revenue from this. It can amount to a million dollars a year or more to the Lottery if credit cards are not allowed." 

Wisler asserted that the credit card issue arose because Visa and Mastercard had altered the lottery's transaction code from "government service" to "betting, casino, and gaming." But Visa responded to the UnionLeader with only a form statement saying that all merchants are required to identify every form of betting as gambling, so as to block such transactions where illegal.

Representative from banks, credit card companies, Congress, and elsewhere had insisted on the necessity of properly defining illegal online gambling so as to not have financial systems simply block all gaming payments, erring on the side of caution. But the Treasury Department was unable to craft a definition that fit the rat's nest of state and federal laws regarding gambling, and now New Hampshire state revenues pay the first price.