The National Thoroughbred Racing Association recently announced JPMorgan Chase, the nation’s largest credit card issuer with 80 million active accounts, has begun allowing customers of account-wagering companies to use its credit cards to fund their accounts. JPMorgan Chase’s decision to approve transactions bearing the higher-risk ADW industry’s 7802 merchant category code could prompt other major card issuers to follow suit, significantly boosting online parimutuel betting handle.
Previously, JPMorgan Chase had allowed customers to use cards linked to their checking accounts for deposits, but had blocked credit-card deposits. This began after Congress passed the Unlawful Internet Gambling Enforcement Act in 2006–although placing online bets on horseraces was legal. Under the legislation, banks are held liable when accounts are used for illegal gambling activities, so to avoid potential violations, some banks simply prohibited horseracing account-wagering operations.
Harness-racing writer Brett Sturman said, “We could certainly debate separately from a responsibility standpoint if players should be allowed to fund accounts through credit cards at all. But to be clear, the issue for horseplayers this entire time wasn’t restricted to only credit cards. As I can attest, debit cards have also been restricted at times.”
NTRA Chief Executive Officer Alex Waldrop called JPMorgan Chase’s easing of restrictions “a major victory for our industry.” He gave credit to U.S. Rep. Andy Barr of Kentucky, co-chairman of the Congressional Horse Caucus and a member of the House of Representatives’ Financial Services Committee, for urging JPMorgan Chase to allow the transactions. ADW operators include the Stronach Group’s XPressbet, Betfair’s TVG and Churchill Downs Inc.’s TwinSpires.
Chase’s decision is expected to increase the handle at Florida’s five major horse racetracks serviced with ADWs: Gulfstream Park West,(formally Calder race track), Miami Gardens; Gulfstream Park, Hallandale Beach; Hialeah Park Race Track, Hialeah; Sunshine Raceway, Tampa Bay area; and Tampa Bay Downs, Tampa.
Last September, the U.S. Treasury Department and the Internal Revenue Service approved new rules on how bettors’ winnings are taxed. Waldrop said that change was “among the most meaningful regulatory advances made by our industry in decades.”
