Mastercard Report Shows Online Gambling Lobbying for Q3

January 13, 2011 | News Category: Gaming Law

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Mastercard Inc., one of the major credit card companies has spent a large amount of money on lobbying the United States federal government in the third quarter of 2010. This information was released as part of the company's mandatory disclosure report.

Mastercard spent $840,000 in the third quarter for lobbying for the following issues: online payments, consumer financial products, and interchange fees.

In order to follow the terms of the UIGEA (Unlawful Internet Gambling Enforcement Act,), Mastercard, along with all the other financial institutions in the United States, had to stop processing any payments for online casinos and other forms of online gambling. Not only did Mastercard have to cease processing these transactions, they also had to ensure that there were none that managed to slip though, because they could be held liable for processing the online gambling payments if this occurred.

The amount of $840,000 that has been spent on lobbying the federal government is 24% more than was spent for lobbying the government last year in the same quarter, the third quarter. Of course, both amounts are much less than the $2.33 million that was spent on lobbying the government when the government was debating the all important financial overhaul bill.

The lobbying covered some issues other than online gambling financial processing. There were issues regarding the use of the Mastercard for general online purchases, intellectual property enforcement, data security, and of course, the issue of online gambling regulation.

Mastercard not only loses out on processing the revenues for those who gamble online, but the company ends up having to spend money and resources to ensure that they block any attempted online gambling transactions. While Mastercard is losing money, and using money, other payment processing companies with less scruples step in where there is a vacuum, and attempt to take over the role of processing payments for those US residents who still choose to gamble online, despite the UIGEA restrictions.

Not only does Mastercard lose out on the revenue, but so does the US government, because all this time, instead of spending money on banning online gambling, the country could have received taxation money from the online gambling sites that accept players from the United States.

Since online poker is likely the most lucrative for Matercard, the focus is somewhat on this issue, however, all online gambling sites would bring in additional revenues for the credit card giant.