Some online gamblers blocked by credit cards

A potential stumbling block to the rapid takeoff of online gambling in New Jersey - where casino sites opened to the public Tuesday - is the refusal of many banks to allow gamblers to deposit money into online casino accounts with Visa cards.

A 2006 federal law cracked down on such transactions, forcing banks to put rigorous systems in place to weed them out. Though they are legal now in New Jersey, Delaware, and Nevada, many big banks continue to snub Internet gambling.

"For seven years, banks have been conditioned on the ramifications and the penalties associated with accepting illegal Internet gaming transactions," said Joseph Pappano Sr., vice president and managing director at Vantiv Inc., which is processing Visa and MasterCard transactions for online gambling in all three states.

Acceptance will come, Pappano said, but it will take time and cooperation from gambling regulators, banking regulators, online casinos, and others.

In a show of government-industry cooperation, New Jersey's Department of Banking and Insurance has been reaching out to banks and federal regulators to help smooth the way, David Rebuck, director of New Jersey's Division of Gaming Enforcement, said Monday.

Brian Mattingley, chief executive of 888 Holdings P.L.C., located in Gibraltar, which is working with Caesars Interactive Entertainment in Atlantic City and is running online gambling for the Delaware Lottery, said the credit card glitches were disappointing.

"You can use the wire facility, and some customers are using that. That is becoming more of a reliable means of depositing money into their accounts, but it's still more convenient, I think, to be using a credit card," Mattingley said.

It's not clear how much impact the Visa problems are having on the start of Internet gambling. Advertising is clearly an issue.

"I think until such time as we start the marketing machine rolling, until such time people genuinely know that online gaming is available to you as a consumer, it could be a slow buildup. On the other hand, there could be a pent-up demand," Mattingley said.

Executives were not disclosing numbers of gamblers Tuesday.

"I can't share any exact numbers with you, but the numbers met and exceeded our expectations. We're very happy with the level of interest," said Stephen Downer, director of international development for Betfair, a London firm running the online casino for Trump Plaza.

The New Jersey Division of Gaming Enforcement said Monday that more than 10,000 people had registered to play online in the first three days of the five-day trial period.

Regulators did not have a detailed update Tuesday.

"We have seen an increase in site traffic since last night due to the outreach of the casino operators, and are encouraged by all their marketing efforts," said Lisa Spengler, Division of Gaming Enforcement spokeswoman.

The agency's first report on online gaming revenue will be released Jan. 14.

That money is not likely to come to casinos through Visa transactions. Fewer than one in five Visa transactions are being approved by banks, said Pappano, of Vantiv. The rate for MasterCard is higher, about 80 percent, because it was already set up for Internet horse betting, he said.

Three banks responded Tuesday to questions about their stance on transferring money into Internet gambling accounts.

PNC said it was not allowing such transfers because its electronic funds transfer policy prohibits them.

Susquehanna Bank said it was not allowing debit-card transactions with onling gambling sites.

Sun National Bank, which is based in South Jersey, is allowing the payments, Mike Dinneen, the bank's director of marketing, said.

"With the commencement of legal online gaming in New Jersey, and with us being a New Jersey-centric bank, we are working closely with our monitoring service to address unique methods to further protect our customers," Dinneen said.

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