After months of remaining on the sidelines, Visa appears ready to establish a considerable presence inside brick-and-mortar sportsbooks nationwide.
Visa is optimistic that it will roll out card acceptance services at sportsbook windows in some jurisdictions within the next month, said Christopher Granger, U.S. Gaming & Lottery Lead at Visa Inc.
“It’s no surprise, the biggest time of the year in the U.S. for sports wagering is the NFL season,” Granger told Sports Handle. “We have a short window, we’re trying to work with operators to at least get some test trials out there.”
Operators in a handful of states already accept Visa and MasterCard transactions for online sports betting. Visa, the world’s second-largest card organization, also offers deposit options at select sportsbooks outside the U.S.
Upon launchVisa is leaning toward accepting so-called “ready funds cards,” for sports wagers, Granger said. The payment delivery method more closely resembles a debit card, than a credit card. The stipulation will require a customer to place a wager from their own funds, rather than an extension of credit.
A cashless society
Visa’s main competition in the sports betting space is from cash itself, Granger noted during a panel session Oct. 15 at the 2019 Global Gaming Expo (G2E). Although bettors are gradually migrating to mobile payments, sportsbooks for decades have accepted cash-only payments at their windows.
At present, numerous sportsbooks currently allow online bettors to deposit funds into their wagering accounts from third-party vendors such as PayPal and Neteller. In turn, the PayPal accounts are linked to a customer’s checking account.
Within the next two years, possibly sooner, Visa could launch an omni-channel solution for gaming through a digital wallet, Granger said. Payments industry experts foresee a cashless world where bettors might use the wallet to fund wagers inside a physical sportsbook and on the casino floor for slot machine credits. Instead of making multiple trips to an ATM and a casino cage, a bettor will be able to manage funds on the same app with a single transaction. Thus the omni-channel solution modernizes the payment cycle.
“Let’s electronify the space, get rid of cash and make it so it’s a more transparent and efficient way to transact a payment transaction,” Granger said.
During a keynote speech at G2E, former New Jersey Governor Chris Christie also addressed the topic of mobile betting among millennials and their preference for making transactions without cash. Christie told an anecdote on how his 26-year-old-son tipped a valet through a Venmo transaction at a recent wedding, to illustrate millennials’ aversion for cash.
“If you don’t make mobile easy and accessible, they will not bet,” Christie said. “They just won’t.”
With a large mix of sharp and recreational bettors, it is difficult to discern the average bet per customer around the nation. Other factors such as location, operator and bet limits also come into play. Prior to the launch of legalized sports betting in New Jersey, Boston College professor Richard McGowan authored a study where he found that Garden State residents spend an average of $340.70 per year on gambling.
Months after its debut in New Jersey, DraftKings CEO Jason Robins noted at a December 2018 gaming conference that the median bet at DraftKings Sportsbook remained under $10. There has been little change in DraftKings’ median bet amounts, a DraftKings spokesman said.
While exploring opportunities in sports betting, Visa has learned that most sports betting transactions fall into a range between $50 and $100, Granger said. The trends indicate that many bettors prefer to keep individual wagers around $10, while placing multiple bets under a single transaction. A bettor who places five separate $10 parlays on an NFL Sunday fits the profile.
Issuers have the right to set their own limits per transaction at the betting window, he added. Once card acceptance becomes available at the windows, sports betting could be placed into a larger gaming category that has an issuer acceptance rate of around 90% for Visa transactions, according to Granger.
Granger appeared on a panel at G2E with Joe Pappano, SVP, U.S. Gaming at WorldPay, Paysafe’s EVP of Business Development, Neil Erlick, and Thomas Winter, SVP & GM Online Gaming, Golden Nugget. At the moment, three prominent issuers — Bank of America, Chase, Capital One are evaluating card acceptance in sports betting, Pappano said. Payment fraud levels at the Golden Nugget are extremely low, Winter explained.
Neil Erlick, Paysafe: Adapting to the unique challenges facing the US payments market: Since the ban on sports betting was lifted in the US, the market has witnessed an incredible rush of activity in the last 12 month, such as New Jersey which wagered a… https://t.co/aRAPqGWVn4 pic.twitter.com/XBgsQekzgt
— SBC NEWS (@SBCGAMINGNEWS) October 18, 2019
New Jersey Division of Gaming Enforcement (DGE) regulations allow for card acceptance in a face-to-face environment at brick-and-mortar sportsbooks, a spokesman told Sports Handle. The division, however, does not regulate merchant or interchange fees at the moment.
Visa’s rules allow for debit card acceptance at sportsbook windows and its networks are arranged to support such transactions, according to Granger. But before Visa conducts a testing phase, some minor details still need to be ironed out. Visa has yet to deliver the payment devices to partnering sportsbooks, while ticket writers must complete card payment training.
“We just need to get over the operational hurdles,” Granger said.
John Brennan contributed to this report