The expansion of sports betting will open the door for people to place cashless wagers utilizing debit and credit cards, among other options, in states across the country, according to payment processing experts who spoke last week during a pair of panel discussions in Las Vegas.
The topic took center stage as part of a conference sponsored by the UNLV’s Harrah College of Hospitality.
Joe Pappano, senior vice president of Worldpay Gaming, said that since the U.S. Supreme Court in May struck down a federal law banning single-wager sports betting outside of Nevada, there’s “been some tremendous movement” on the cashless transaction front by companies like Apple and Google.
“Apple Pay and Google Pay better understand the internet gaming and sports betting ecosystem now (because) the industry has been legitimized,” Pappano said. “When iGaming rolled out, it (affected) less than 5 percent of the U.S. population in Nevada, Delaware and New Jersey. Now they are looking at this opportunistically.”
The biggest challenge in going from cash to cashless will be the regulatory environment, Pappano said, saying that it was “unreal” that people can have a seamless and frictionless payment experience, even in casinos – except when they walk on the gaming floor.
“If I’m going to legalize sports betting, why wouldn’t I take the opportunity to look at adding some form of cashless (option) if it’s going to take place on the gaming floor,” Pappano said.
It’s about collaborating and educating regulators to show the benefits of going from cash to cashless – the audit trail and responsible gaming aspects and the cost of handling cash, Pappano said. Digital wallets are more common in Europe, he said.
“Everyone in the ecosystem is motivated to speed up the transaction,” Pappano said. “What we have been able to do on a jurisdictional basis is sit down with state legislators and regulators, and lottery directors, and educate them. You already have inherited consumer protections built (into the ecosystem) that work. Once you do that, it allows them to go back and modify regs that most are very dated and don’t accommodate the new era we’re operating in of instant gratification.”
As for Visa, MasterCard and other cards for gaming use, Christopher Justice, president of Global Payments Gaming Solutions, said the companies claim risk to their reputation for why there’s such a large number of declines of credit cards and debit cards in the 65-percent range for iGaming.
“Just because I’m willing to put $50,000 of my credit limit on the Golden Knights winning the Stanley Cup doesn’t mean Bank of America or J.P. Morgan wants to make good (on it) if I default on my payments,” Justice said. “They don’t want the risk involved in dealing with the issue.”
Omer Sattar, co-founder and executive president of strategic initiatives for Sightline Payments, said financial institutions worry that casinos are havens for money laundering. Sattar recommended that the industry begin to engage with the FDIC, the Federal Reserve and other regulators, much as it has with the U.S. Treasury Department’s Financial Crimes Enforcement Network. He said gaming is equal to or better than most in the retail sector when it comes to disputes and chargebacks.
“We’ve been talking about how to get the banks to not think about the risk, but maybe we should convince the bank’s regulators to think about us not being high risk,” Sattar said. “There’s easier ways to launder money other than a casino, and we want them to see that.”
Ultimately, Sattar said he’s optimistic the national expansion of sports betting will lead to change. Sports betting is becoming more acceptable by the public and not looked at in the same way as slot machines or blackjack.
“Over time, that (expansion) will move the needle. I don’t think it’s a Visa or MasterCard issue, but issuers are concerned about risk and what the regulators think.”
If casinos don’t make transactions easier for sports bettors, he said, it’s going to be difficult to wean people off illegal sites.
Justice contended that change is coming in a society where people can go online, make a purchase, and have it delivered in a couple of hours. People can do roughly the same thing when they go to a fantasy site, make a payment, and pick their lineup, but that’s not considered gaming. When they try to do the same for sports bets, Justice said, those transactions are declined.
“Over time, banks will soften, but they will soften faster on debit card transactions than credit card transactions,” Justice said.
Justice said it’s important to validate authentic players and eliminate troublemakers, which will ensure that consumers can play safely and which will help “provide concrete evidence to financial institutions that this is a market they want to participate in.”
“Hey, it’s a better bet than retail,” Justice said. “Pun intended.”
