Mastercard has told Payment Expert that investigations into claims that illegal gaming firms have been facilitating deposits via its payment network are imminent.
The Guardian alleges that Visa and Mastercard were listed as available payment options across nine different unlicensed gaming sites in the UK. Mastercard was apparently listed as a payments option across all nine websites while Visa was listed on two.
All nine of the sites are illegal in the UK due to all betting firms operating in the country being required to hold a UK Gambling Commission (UKGC) licence. Confronting illegal firms has become a priority for the Commission in recent years, particularly as the regulated UK market adjusts to new requirements after the review of the 2005 Gambling Act.
It is worth noting that these payments were most likely facilitated by third party acquirers, which connect merchants to the duo’s payments networks under the expectation of due diligence being carried out, and not via a direct relationship between Visa, Mastercard and illegal firms.
A Mastercard statement provided to Payment Expert read: “We have zero tolerance for illegal activity on our network. When specific instances of potentially unlawful or illegal activity are identified, we investigate the allegations so that we can work with partners to take the appropriate action. We will now do so with the sites which were noted.”
Similarly, Visa has also condemned any illegal use of its payments network and has emphasised the significance of its Visa Integrity Risk Programme, a set of guidelines and requirements for its partnered payment acquirers which, as noted above, connect merchants to its network.
“Visa is committed to maintaining the integrity of our payment system,” the firm said. “We do not tolerate the use of our network and products for illegal activity, and we are vigilant in our efforts to deter illegal activity on our network.
“The Visa Integrity Risk Programme establishes a set of ecosystem controls, requirements and capabilities that seek to deter, detect and remediate noncompliant transactions across our network.
“This framework helps network participants that support merchants in legal businesses that are at higher risk for illicit activity maintain proper controls and oversight processes to identify and deter unlawful transactions from entering the Visa payment system.”
The UKGC, meanwhile, remains focused on its objective of confronting the black market, but appears to be leaving any investigation into the way payments to the illegal sites occured in the hands of the payments processors.
“We are aware of these websites and continue to take action to disrupt the unlicensed market, including working with online platforms and with payment providers,” a UKGC spokesperson told Payment Expert.
“Since the start of April, our team has issued over 770 cease and desist, and disruption notices – this includes 262 cease-and-desists issued to operators and 205 to advertisers.
“Over that same period the Commission has referred over 102,000 URLs to Google with 64,000 of these removed by the search engine, and over 260 websites taken down. This is more than a tenfold increase in URL takedowns in comparison to the whole of 2023 to 2024.”
UKGC cautions customers over illegal sites
Visa and Mastercard were offered as payment methods alongside cryptocurrency on the illegal platforms, the Guardian reports. The use of crypto is unsurprising as it better enables both the operators of these platforms and their customers to disguise funds.
Placing bets via cryptocurrency is a legal grey area in the UK, no specific laws existing on the subject and the UKGC also offering no specific regulations or licensing requirements around crypto.
Even platforms like Stake, which specialise in taking bets via crypto, only accepted bets via fiat currency in the UK during its tenure as a licensed operator in the country which was cut short last month due to marketing infractions rather than anything payments-related.
Though it is a bolder move for these illegal sites to have allowed deposits via Mastercard and Visa due to the traceability of funds, this will have enabled the operators to expand their reach beyond the more niche demographic of crypto holders, with around one-in-10 Britons owning crypto.
Many of these operators’ customers lost substantial sums of money gambling via the illegal platforms. One customer told the Guardian that they had won thousands on the platform after depositing using their bank card, but were then unable to withdraw it.
“Anyone gambling on unlicensed sites is supporting illegal activity and putting themselves at risk,” the UKGC’s spokesperson told Payment Expert. “Your financial data could be stolen, harvested or misused and you may not even be paid out if you win.
“These sites support crime and won’t have the standards or safeguards we insist on such as providing self-exclusion or looking out for and tackling gambling related harm. Consumers can easily check if a site is licensed by searching the business register on our website.”
The UKGC has not indicated that it will turn its attention to Visa or Mastercard, with the regulator remaining primarily focused on the activities of illegal gambling sites and not how payments are made to these sites.
Regardless though, the news is not a great look for Mastercard and Visa at a time when the firms are finding themselves under increasing regulatory scrutiny in the UK.
The Payment Systems Regulator (PSR) has notably taken some swings at the firms and their perceived dominance over UK card issuing, seeing this as having potentially negative consequences for UK businesses.
