Mastercard and Visa are facing scrutiny for processing payments for unlicensed gambling sites, with UK players reporting heavy losses. An investigation by The Observer found that despite the payment giants' promises to block such activities, they still facilitate transactions for illegal operators.
The investigation identified nine gambling sites targeting UK players, which did not hold valid licenses and offered Mastercard as a payment method, with two sites also listing Visa. These platforms attracted millions of UK visits from October to December last year through search engines and social media promotions.
The effectiveness of payment company regulations is questioned. Although the two credit card giants profit from each payment, critics question their thoroughness in preventing unlicensed gambling transactions. An agreement reached with the Gambling Commission in 2014 has not shown significant progress.
Unregulated gambling has severe human impacts. A UK player lost £60,000 at an unlicensed casino, describing it as a "life-destroying" nightmare. Another gambler filed a legal lawsuit in Germany, claiming the casino stole his life. It is also common for winnings to be withheld, with the unlicensed platform FatPirate blocking player withdrawals, and another site, Gransino, deleting player accounts.
The operators of these sites are often based overseas and did not respond to requests for comment. Mastercard and Visa insist their networks prohibit illegal activities and vow to investigate the allegations.
The UK Gambling Commission is aware of these sites and promises to continue enforcement. However, despite receiving complaints, all sites were still operational last week. Some sites offer high bonuses and free spins, incentivizing UK players to participate. The UK Gambling Commission faces a lawsuit for its regulatory investigation of Flutter Entertainment's Betfair.
The regulatory body claims to have issued over 770 stop notices in the past 11 months, submitting more than 100,000 URLs to Google for removal. Experts believe that enforcement alone is not enough. Professor Heather Wardle from the University of Glasgow calls for increased industry accountability, stating that every participant should bear responsibility.
Former Conservative Party leader Ian Duncan Smith expressed similar concerns, urging Mastercard and Visa to take swift action to block transactions for unlicensed gambling sites.
The investigation focuses on payment orchestration tools like PaymentIQ, which are hidden within gambling sites and swap transactions across multiple financial channels to gain approval. The French company Worldline calls it a "neutral" tool that does not control compliance or customer funds.
The involvement of payment processors blurs the lines of responsibility for maintaining transaction transparency. Visa and Mastercard believe banks have the responsibility to ensure merchants comply with regulations, but consumer rights advocates think credit card companies should implement stricter controls.
Unlicensed gambling is an increasingly serious issue in the UK. Last year, UK gamblers spent over £2.7 billion on unlicensed sites, which attract gamblers and target the most vulnerable. Macau witnessed a sharp increase in illegal gambling incidents in 2024.
The Gambling Commission warns consumers to be aware of the risks, stating that financial data may be stolen or misused, and even if they win, they may not receive compensation.
The continued existence of these sites raises a question: If regulatory bodies and payment companies cannot effectively stop them, what else can we do?
Mastercard and Visa are under pressure, and the coming months will reveal whether meaningful changes will occur, or if the cycle of illegal gambling and consumer losses will continue.
