Online gambling is on the rise. According to Statista, the industry had a market size of $61.5 billion in 2021 and was projected to grow to $114.1 billion by 2028.

If you're in the industry, you may already know that obtaining a merchant account for gambling businesses has its complications. With all those transactions occurring in the U.S., why is online gaming considered high-risk? Why are there issues with securing an online gambling merchant?  

Here are four reasons.

1. Fraud.

All credit card processing involves some risk of fraud, but even more so for online businesses where the cardholder doesn't have to be present.

Online gambling has the added issue of regret. Some people might lose money on a gaming site and report their transactions as fraudulent even though they were legit.

2. Age restrictions.

Online gambling requires age verification. As with many industries that have age restrictions, such as adult sites and electronic cigarette sellers, chargeback rates could increase, thus the high-risk label on the online gaming industry as a whole.

3. Legalities. 

Online gambling laws are complicated. In the U.S., each state has its own set of rules and regulations to navigate. The lack of uniformity can lead to legal issues that could affect the online gaming company and its transactions.

4. Offshore activity.

Many online gambling businesses have offshore locations, which could lead to issues such as money laundering in countries with more lenient reporting regulations. Though your online gaming site might not have any offshore locations, the industry is tabbed as high-risk.

Get the help you need to obtain a high-risk merchant account.

Being a high-risk merchant doesn't mean there's anything wrong with your line of work, and it shouldn't hinder your ability to get a merchant account. Let Humboldt offer your online gaming business the sponsor bank connections you need to secure an online gambling merchant account.