Why do most online casinos take my money but can’t seem to pay me?This is probably the number one question most online casinos deal with and the answer is fairly simple. First of all, the methods companies use to accept your deposit is very different from the methods used to process payouts. Basically, companies are not able to refund your credit card so they are forced to use alternate methods for payments.
How do deposits work and why is the process more reliable than withdrawals?
Since today most online companies handle payments through credit cards, the volume alone of such transactions makes it very easy to disguise online gambling deposits from being flagged by the authorities.
Here is the process most of these companies follow:
- Each casino opens up various companies under different names such as for example: T-Shirt Heaven or Antique Books For You.
- Get a credit card merchant account for each business.
- Choose one of these businesses to accept the credit card charges.
- Every account must be emptied out everyday just in case your company is flagged and closed down.
- If your company should get shut down you must immediately switch your processing to another company.
- Repeat #3
This process makes it extremely difficult for the U.S. authorities to track all deposits. They wouldn’t waste their time knowing that they could easily start up the business all over again in no time.
What is the process for a withdrawal, and why is the process so defective?Online gaming sites like Ladbrokes online casino seem to come across one big challenge, unlike other online businesses, they are responsible for paying their customers/players and in this case most credit card companies do not look kindly upon chargebacks and refunds.
The only viable payment method, in this case is checks which causes a bit of a problem within the process. Here’s why:
If you’ve been gambling within the last few years then you are aware of the UIGEA, the U.S. legislation which put an end to processing online gambling payments within the U.S. Due to this legislation, it is incredibly difficult for an online casino to simply cut you a check. The U.S. DOJ has their own processes used to investigate and search for such transactions.
Here’s a little peak into what the DOJ does:
- They sign up and deposit at a casino.
- They trace that deposit and get that company closed. Here’s where the online casino uses their old switcharoo process. (read point 2)
- Request a payout.
- They trace the check, and get the bank account closed. The bank is also held responsible for not following the guidelines of the UIGEA and they may lose their rights to do business with American financial institutions.
What a process right? Well we’re not done yet, such companies need to keep a bank account free and clear from any suspicious dealings, which is not an easy task for online gambling companies to find such a bank to harbor their funds. Once such a company finds a bank, there is nothing in the world they would do to jeopardize that relationship.
Also, it’s not just any bank that can handle such transactions; it needs to be a sizeable entity that is willing to carry out thousands and thousands of checks per year. The only way to do this efficiently is to involve the PAYMENT PROCESSOR.
What Is A Payment Processor?
So what does a payment processing company do? Well, they print checks for companies such as these. What happens is that they will receive a printout listing the names of all outgoing checks which they will eventually print and send off to you the player.
Such companies have very specific processes in place to help them avoid problems when it comes to issuing checks. I don’t have the exact layout of the steps they take to issue checks but it’s not exactly a process that’s public knowledge. It’s all very secretive but it seems to work.
Well, if you haven’t figured it out by now these processing companies run the risk of being shut down at any time. If they are shut down they will never be able to do business in that manner again and any funds in their possession will be confiscated.
For a casino to do business with a payment processor they are required to leave a security deposit which could range anywhere from 100K to millions of dollars. This deposit is required in order for them to handle their day to day issuing of checks. Imagine that if a processing company goes down so does the deposit money left behind by the casinos.
There are two kinds of payment processors: The honest ones who try to put together a good process and avoid getting caught or the guys who simply work to collect as many security deposits as possible before disappearing and claiming to be shut down. Choosing a good payment processor is like finding a needle in a haystack.
How does the processing get messed up?
Once a processor gets shut down, a casino has no way of knowing which checks got cashed, and which ones bounced. How would a casino fix such problems without having a track record? How did this happen? Here are a few possibilities: Is the problem with the processor? Is the problem with the customer’s bank? Could it be that the payment processor is scamming us? Are we being scammed by a group of players trying to cause a meltdown? Could this just be an isolated case with a specific bank?
The casino doesn’t know which players are actually honest and which are trying to take advantage of the situation and earn extra cash. To top things off the casino has already lost hundreds of thousands of dollars or even millions and is in the process of finding another processor quickly.
You can only imagine what it could possibly be like for all the hardworking customer service agents out there that have to deal with the masses of irate customers wanting to know where their money is. At this point, management has no answers to give their team and well each representative will do their best to keep callers somewhat calm.
This is just a taste of what goes on behind the scenes.
How come some casinos seem to have more problems than others?
Well, what it comes down to is that some casinos are just more visible and attract more attention to themselves than other casinos. For example, there have been several instances where a certain casino has drawn attention to themselves time and time again by disregarding U.S. authorities. The U.S. government will of course flag this casino and keep an eye on them.
As an employee of the DOJ, there’s a good possibility one of your main responsibilities would be to sign up with this casino and work toward shutting down their processors. There is a good chance that there is someone working toward this goal as we speak.
If a company is experiencing processing problems then why don’t they alert players on their website?
Since processing problems tend to happen frequently and solutions tend to be found fairly quickly then I suppose they don’t see much of a point doing so. In my opinion, it would be beneficial to the players to be warned that such things could occur but most or all casinos just don’t do it. Why you may ask? Well, in all honesty, which company would advertise such a thing?
You may feel that this is unethical? The truth is that any online casinos that accept American players at this point in time are considered unethical and until the UIGEA is repealed online casinos will continue to operate in this manner.
So What Can I Do?
Well, one thing you can do is to just get over it!
Just to remind you that you are choosing to play with an online casino whose processes the U.S. government considers to be illegal. It’s only a matter a time before a processor will be found out or jammed in some way. It’s all inevitable.
You have a few options, you can choose to rant and rave about the whole situation or you can simply stand by until the problem is resolved. You have to understand the nature of the business and the scrutiny the industry is currently under. This is just one more gamble you have to take.
Which is better? Big casinos with deep pockets or smaller ones who tend to stay under the radar?
Well, bigger companies will always attract more attention which will eventually attract more processing problems. One of the positive aspects is that they will have more resources and features to make the overall experience more enjoyable and in turn creating a sense of loyalty from their players.
Smaller companies will be more at risk and may suffer major processing problems. It may take a bit longer for them to be found out but when it does happen they will most likely take a big hit which will cause serious damage.
Whatever your choice may be you are always taking a chance so in the end, it’s up to you to make the right choice. Thanks to the UIGEA this is the way things will have to be at least until there is a change in the legislation.
How can I minimize my vulnerability?
One thing all players must understand is that the American government is not going to be looking out for your best interests especially when you are playing with online casinos.
The best advice that can be given at this point is to avoid requesting payments by check. Checks do seem to be the easiest option but it is also a method that will most likely get stuck in the process. There are a lot of other options available these days including ACH, bank wires and even e-wallets which can be just as efficient.
What it comes down to is that you should do everything possible to protect your funds and don’t expect these companies to do all the work for you. If all it takes is for you to pay a little extra to ensure your funds arrive safely then by all means you should do it.
Try to choose companies that offer “alternative” payment methods, and sign up for one. If they should get jammed up by a check processor, there is a good chance that you won’t be directly affected.