Horse Racing Payment Processing: Chase Approving Deposits

The biggest bank in the United States has finally gotten on board with online horse racing betting. After blocking payments to legal US horse racing websites for years, JPMorgan Chase changed its policy earlier this month and has now begun approving deposits made by customers to licensed horse racing betting sites.

The horse betting industry stands to benefit in a big way now that JPMorgan Chase is no longer blocking its 80 million+ potential customers from betting on horse races online. The National Thoroughbred Racing Association made the announcement on February 6^th and applauded Representative Andy Barr from Kentucky for his effort in bringing JPMorgan Chase and the racing industry together to make this happen.

NTRA President and CEO Alex Waldrop said, “This is a major victory for our industry and one that would not have come about without the efforts of Rep. Andy Barr (R-KY) and his staff.”

Rep. Andy Barr is a co-chairman of the Congressional Horse Caucus and had this to say:

“I am delighted that this latest move by Chase will have a positive economic impact on Thoroughbred racing and breeding in Kentucky and across the nation. I have appreciated working with the NTRA and Chase to make this development possible and look forward to continuing our efforts on behalf of Kentucky’s signature equine industry.”

The UIGEA, Gambling Payments and Legal Horse Racing

JPMorgan Chase’s ban on credit card deposits was never instituted as a targeted attack on legitimate horse racing sites. Online horse racing just got caught up in a sweeping decision made by JPMorgan Chase to block all transactions related to online gambling after the passage and implementation of the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA).

The UIGEA is largely responsible for crippling the illegal offshore betting industry that serves the United States, but it has also had negative impacts on the legal and licensed betting industry back home. People often refer to the UIGEA as the piece of legislation that made online gambling illegal in the United States, but that’s not technically what happened.

What the UIGEA actually did was criminalize the processing of certain types of financial transactions related to online gambling. The federal government already had laws on the books that it used to target offshore gambling sites, but those laws did little to dissuade people who live overseas and out of reach of federal authorities.

So, the UIGEA was passed to target the money that funds illegal online betting operations. Rather than targeting players or operators, lawmakers figured they would starve offshore gaming sites of the vital cash they need to stay afloat.

By targeting banks and financial firms located on U.S. soil, the UIGEA was much more effective at ensuring compliance. With local players dissuaded from performing financial transactions related to gaming, offshore betting providers had a more difficult time moving money around. The UIGEA was not a complete success, but it did put a major dent in offshore operations by blocking popular deposit methods.

The UIGEA does include a carve-out for licensed horse racing sites and daily fantasy sports, but it also does not specify that banks MUST process transactions for those businesses. Due to the way credit card transactions are coded, some banks just found it easier to block all transactions related to gambling, whether it was related to illegal offshore gambling or legal betting sites located right here in the United States.

JPMorgan Chase was the biggest bank to go that route. Not only was a blanket ban easier to implement, doing so was the more conservative approach from a legal perspective. Online horse racing transactions probably don’t even show up as a blip on the radar for a bank the size of JPMorgan. In the end, little incentive combined with uncertain risk led to JPMorgan Chase blocking all credit card transactions coded as gambling.

The details on how Rep. Barr was able to convince JPMorgan Chase to get on board remain unclear, but the important point is online racing betting has just gained access to a very large chunk of players that were previously inaccessible due to being unable to deposit with their JPMorgan Chase cards.