A Big Win for Sports Betting – T1 Payments and Fantasy Sports
Sports betting in the United States has just been given the go-ahead by the U.S. Supreme Court, and states are now free to enter what has become a lucrative industry.
Experts predict that most bets will be placed online in the near future. That’s partly because doing business online or via apps ramps up the profit potential. And also, since many states will need to sort out legal issues before they can enter the marketplace, a significant opportunity exists for those who can offer betting services across state lines.
Additionally, states are expected to encourage mobile and online betting options, to divert gamers from making transactions with illegal bookmakers. The underground sports betting economy in the United States is now estimated to be worth at least $150 billion a year – much of it illegal. Legal sports betting in Nevada totaled nearly $5 billion last year.
Online Wagers – A Risky Business?
Online gaming is already considered a high-risk business, and that’s not likely to change with the SCOTUS ruling. Any business offering online sports wagers – and other types of gaming – will see significant benefits from working with a Payment Processor who has experience in high-risk payment space.
High-risk businesses have a higher-than-average chance of experiencing:
- Payment card fraud
- Product returns/refunds
- Out-of-country sales
There are other issues that can result in a business being classified as high risk, including the owner’s own financial history and how long the company has been in business. Since SCOTUS has just struck down the federal law, many financial firms will be struggling to understand how to offer payment services to businesses offering sports wager services online.
The competition in the sports wager space is expected to be fierce and fast. Even if a business could afford to wait to be approved by standard Payment Processors, high-risk businesses will typically get automatically rejected by the majority of financial instructions. Your best bet: work with a company like T1 Payments who specializes in offering financial services for high-risk businesses.
T1 Payments get high-risk businesses online fast, with a comprehensive service package that includes risk management, chargeback protection, and advanced fraud monitoring – that can quickly be tailored to meet any high-risk business’ specific needs.
What Happened? The Supreme Court Decision
On Monday, May 14, the U.S. Supreme Court, in a 6-3 ruling, struck down a federal law that banned states from regulating (and taxing) sports betting. The “Professional and Amateur Sports Protection Act” (PASPA) didn’t ban sports betting – it just didn’t let states do anything about controlling the practice. States that already had sports wagering processes in place (Nevada, Oregon, Delaware and Montana) were grandfathered in under PASPA.
New Jersey challenged PASPA, and won. From the SCOTUS opinion:
“The legalization of sports gambling requires an important policy choice, but the choice is not ours to make. Congress can regulate sports gambling directly, but if it elects not to do so, each State is free to act on its own. Our job is to interpret the law Congress has enacted and decide whether it is consistent with the Constitution. PASPA is not. PASPA “regulate[s] state governments’ regulation” of their citizens. …. The Constitution gives Congress no such power. The judgment of the Third Circuit is reversed.”
It is now up to each individual state to regulate sports gambling as it sees fit, or for Congress to step in and standardize sports wagers across the country. It seems likely that states will rush to take the lead. It won’t happen overnight though; many states will need to update their constitutions before their law makers can legalize sports betting.
The New Jersey Division of Gaming Enforcement has said they can have their new regulations in place within 90 days, and will be able to offer sports betting at its racetracks and casinos – and almost certainly online- before the end of 2018. New Jersey’s Monmouth Park track says they can be ready to go within a few weeks. Other states that are likely to move forward very quickly include Connecticut, Delaware, Illinois, Mississippi, New York, Pennsylvania, Rhode Island and West Virginia.
Fantasy Sports and T1 Payments
As the Payment Processor of choice for the online gaming industry, T1 Payments is perfectly positioned to assist customers in accelerating their profit potential now that sports betting has been legalized.
Our customers know that T1 Payments offers exceptionally flexible underwriting, fast approvals, and flat fee merchant accounts. Our customers all gain easy access to all the most popular shopping cart solutions, a secure payment gateway, active account monitoring with fraud scrubs and real-time online reporting. Our customer care team is knowledgeable and motivated to solve problems and works hard to keep our customers well-positioned for success.
To find out more about our customizable global payment solutions for high-risk merchants, and how the SCOTUS ruling may open new online opportunities, please visit t1payments.com or call 866-518-2216.