High Risk Merchant Solutions for Sports Betting Businesses

Although the world of sports betting is booming in popularity in the U.S. and has vast money-making potential, it is pretty challenging to get into the industry and run a successful business without a credit card processing account. Most sports bets are placed with credit cards, so having an option to accept credit card transactions is vital — but that is not as simple as it may sound.

Following the collapse of the 1992 Professional and Amateur Sports Protection Act (PASPA), sports betting is currently legal in 21 states and Washington DC (however this number could very well rise to 32 over the next five years, the Associated Press news agency reports). Unfortunately, however, in the eyes of most traditional financial institutions, sports betting businesses are still 'risky.' Why, though?

Well, apart from the fact that sports betting is still in the gray legal area, there are many reasons why banks and payment processors refuse to support sports betting businesses. With the industry’s murky background and reputation and excessive chargeback ratios, credit processors would rather pass than go in and tackle the nuances that come with approving a sports betting merchant account. As such, sports betting merchants need to have a specific type of merchant account that is specifically made for high risk businesses to process and accept credit card payments.

Why are there so many chargebacks?

When people bet, they either walk away as a winner with a cash bonus or they walk away as a loser who has lost money. Some of these losers, when they see expensive charges on their card statements, get the buyer's remorse and tend to avoid footing the bill for their losses by disputing the transaction, which results in a chargeback.

What’s needed to get a sports betting merchant account?

If you operate a law-abiding, trustworthy, reputable company, high risk merchant service providers can help you process credit card payments on your sports betting site efficiently and effectively. These providers often work with a very wide spectrum of banks and processors outside the U.S. that have solutions for just about anyone operating in a high risk industry. Bear in mind, though, that even the best provider will not be able to guarantee you a merchant account if you have had questionable business dealings, a flawed business model, and a past checkered with far too many chargebacks.

How to apply for a high risk sportsbook merchant account?

To begin the process, all you need to do is submit an online sportsbook merchant account to a trusted provider and provide the following items for review to the underwriters:

• Scanned completed and signed merchant application.
• Passport copies of all owners.
• Company incorporation papers.
• Current utility bill for each owner
• Six months of current credit card processing history.
• Three months bank statements

Once your application has been approved (which takes only 3-4 weeks), you can start processing credit card payments on your sports betting website.

Final Notes

Whether you are a well-established sports betting merchant looking for better processing, or a new player in the game looking to get things up and running, a payment processor can help. That being said, it is important that you give yourself some extra time to find a trusted payment processor that will work with you to understand and meet your business needs — one that can ensure that customer bets are processed accurately.

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Created on Apr 25th 2020 08:56. Viewed 326 times.

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