Fantasy football and Sports Betting is big business. Make believe managers spend an average of $556 annually to create “teams” on mock draft day and run them through a simulated “season” in a fantasy “league”. 44 million people entered the market between 2013 and 2017 according to the Fantasy Sports Trade Association. In 2017 there were an estimated 59.3 million players in this $7 billion industry. If you cater to this specific industry, getting approved to accept online payments is a must.
Fantasy football has become a popular new way for people to gamble. This form of gambling has, like most others, migrated to the internet. In 2016, 39% of fantasy game players use a mobile device primarily to draft a team, check scores, change a lineup, and research players. To compete in this environment, fantasy sports betting businesses must offer their customers the ability to pay online for these services via credit and debit card transactions.
Accepting online payments requires the cooperation of banks and traditional lending institutions. Unfortunately, the fantasy betting world is considered a high-risk industry due to its history of excessive chargebacks. This can make it difficult for merchants to find an online payments services processor.
Fortunately, there is SecureGlobalPay. A recognized leader in working with high-risk industries for online payments. SecureGlobalPay has experience providing merchant accounts for fantasy sports online betting and fantasy football betting merchants.
Apply online now for a fantasy football betting merchant account. Although an application for online payments does not guarantee approval, successful applicants can begin processing payments in as little as 24 hours. SecureGlobalPay also offers chargeback management tools, a payment gateway and fraud filters to monitor online payments.
Merchant Accounts for all Fantasy Sports Betting
Fantasy football is by far the most popular form of fantasy sports betting. SecureGlobalPay approves and has had experience providing accounts for the other fantasy sports:
SecureGlobalPay is prepared to work with merchants that have been rejected or terminated by other credit processors. SecureGlobalPay also works with merchants that have bad credit, no credit, or a history of excessive chargebacks.
Getting a Fantasy Football Betting Merchant Account
To obtain a fantasy football betting merchant account for online payments, businesses must begin by filling out SecureGlobalPay’s simple online application.
Click here for a list of items you will need to provide underwriters for review.
Application does not guarantee approval, but merchants who do obtain underwriter approval can begin processing credit card payments in as little as 24 hours.
The Underwriter’s Merchant Account Review
Underwriters are charged with confirming that an applicant is running a law-abiding, reputable business.
Click here for a preview of what to expect during the underwriter’s review of your merchant account.
Merchants can best prepare by settling any unpaid debts and putting some savings in the bank. It is also best practice to have the principal with the best credit submit the application. Taking these steps will improve your chances of approval. It will also diminish the likelihood your account will be restricted by processing volume caps or a mandatory rolling reserve.
Fantasy Sports Betting and the Law
The Unlawful Internet Gambling Enforcement Act of 2006 is a federal law banning online games of chance, like online poker. Fantasy betting leagues are exempted from the law because it was a game of skill instead of a game of chance. Fantasy football betting merchants can lawfully operate online.
Despite this, banks continue to view these business types as high-risk businesses and risky financial endeavors. Luckily, businesses can get credit card payments processed by SecureGlobalPay. SecureGlobalPay works to get a payment solution that suits each individual business. Fill out SecureGlobalPay’s online application today.
Understanding the Risk to Banks
When merchants are unable to provide the services they advertise, customers tend to be unhappy. When merchants accrue disputes and chargebacks underwriters pay attention. Occasionally, merchants default on the excessive costs associated with these disputes. When the funds to cover these costs and disputes are not present, processors can be left responsible.
Underwriters always seek to determine the likelihood a business will rack up disputes, chargebacks and fail to perform on the services promised.
The government’s regulations on fantasy sports and gaming are strict. Processors can be held liable for merchants’ skirting the laws. To protect themselves, processors must ensure that merchants are following the rules.
Banks, too, are wary of partnering with fantasy sports betting operations. To maintain a good reputation, banks will often avoid high-risk businesses. Though the public has embraced gambling and fantasy sports, banks remain very cautious.
Because fantasy bets taken online do not involve a face to face transaction, they are viewed as high-risk. The lack of personal contact and accountability renders the entire process vulnerable to fraud.
Credit card fraud as it relates to online gambling has a very simple explanation. Whenever players bet on a game, they are taking a chance on either winning or losing the bet. Not everyone accepts defeat gracefully.
Many chargebacks are due to sore losers. When online gamers lose money, they will often try to avoid paying for their losses by starting the process for a credit card dispute. This results in a chargeback.
Gambling online can become an expensive habit. People are sometimes tempted to place extremely large bets. But once they see the charges on their credit card bill, they can experience buyer’s remorse and dispute the charge. This is what is known as ‘friendly fraud.’
Customers abuse the chargeback system as a way to play a game of chance online for free. Unfortunately, industries that sell higher-ticket items or charge large fees for their services get targeted for fraud more often than most.
Managing Chargeback Ratios
Maintaining low chargeback ratios is key to running a successful sports betting business.
Banks will typically terminate merchant accounts for businesses with a chargeback ratio of 3% or higher. This means chargebacks on 3 out of 100 transactions – not a terribly high threshold! The question is how to keep the ratio low.
Excellent communications and record-keeping are essential to the chargeback management process. Always ensure that details of every transaction are kept. Make sure to include the exact dates and times of transactions.
It’s also a good idea to track and save the IP address of the computer from which the purchase was made. This information can be used to help fight a dispute.
Make sure and maintain excellent communication with your client base. Ensure that your contact information and refund policies are prominently displayed on your website.
Save and securely store all communications with clients, including: bills, receipts, e-mails, satisfaction surveys and follow-up communications. This will help prepare clients for what they will see on their credit card statements. Clients who are prepared for charges are less likely to initiate disputes.
In addition to these steps, businesses should be ready to offer full refunds immediately to dissatisfied customers. Refunds are more cost effective than excessive chargebacks.
Follow-up correspondence in the form of e-mailed receipts also helps remind customers of transactions. In the case of fantasy football gambling, it can also be a good way to bring them back to a site to bet again.
Fantasy Football Betting Categories
Numerical Standard Industrial Classification (SIC) codes are assigned to all businesses, including fantasy football betting merchants, by the United States and other countries throughout the world. These codes identify the primary purposes of these businesses.
Sports betting, fantasy football, and gaming use a wide vary of SIC codes, including:
- 7999: Amusement and Recreation
- 7374: Computer Processing and Data Preparation
- 7997: Membership Sports and Recreation Clubs
Visit the United States Department of Labor to view a complete SIC list.
Federal statistical agencies classify establishments which are used to collect, analyze, and publish statistical information about similar types of businesses. They use a list of six-digit numerical codes known as the North American Classification System (NAICS). The data gathered is used to determine the way the businesses impact the U.S. economy
Typically, fantasy sports and gaming related merchants use one of these codes:
- 561410: Gaming and Fantasy Sports
- 518210: Data Processing and Related Services
- 611620: Sports and Recreation Instruction
- 713290: Other Sports Forecasting Industries
- 713990: All Other Amusement and Recreation
- 799913: Sports Forecasting and Lottery Services
- 79991301: Bookmakers
- 79991302: Sports Forecasting Establishment
Visit the United States Census Bureau’s Northern American Classification System to view the complete NAICS code list.
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