In 2018 the Supreme Court struck down a 1984 federal law that prohibited gambling in most states. And that opened up an entirely new playing field for online gaming establishments now free to operate in any state that would allow them. And as Ingo Money CEO Drew Edwards said in a recent conversation with PYMNTS’ Karen Webster, it opened up a whole new world of tangled regulations as 50 different jurisdictions will attempt to put together rules to prevent online gambling sites from becoming havens for people looking to launder money.
“Casinos use all kinds of tools including facial recognition with cameras everywhere,” Edwards said. “And I’d imagine the feeling among regulators has been that an organized money laundering effort could be policed because they would actually see it happening. But now gaming and sports betting is moving online and regulators are just now trying to figure out how to manage it.”
That management process, he said, is not exactly on smooth ground as the regulatory efforts are a work in progress. There have been advances. For example, Visa has recreated the MCC codes associated with online gambling to have a merchant verification process built in so that banks are no longer “blanket denying” anything that looks like a gambling transaction. But allowing each state to create a different set of rules, he said, remains a problem for a payments processor.
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