Card Processing for Gaming and Gambling: Onshore vs Offshore

Online casinos, sports betting sites, and gaming platforms thrive on the ability to accept card payments from players. Implementing card processing for gambling businesses, however, is not as simple as plugging in a payment gateway. Gambling is categorized as a high-risk industry, and both banks and card networks impose strict rules on Visa/Mastercard transactions in this sector.

Understanding MCC 7995 and High-Risk Underwriting

One of the first things a gambling merchant will encounter is the special merchant category code – MCC 7995. This code is designated for betting, casino gaming, lotteries, and other gambling transactions. Being tagged with MCC 7995 instantly signals banks and card networks that the business is high-risk. In fact, Visa and Mastercard apply higher interchange fees and monitoring to MCC 7995 merchants due to the elevated risk profile. Operators should be aware that every Visa/Mastercard transaction will carry this code (or a related gambling code) and plan accordingly.

Why does MCC 7995 matter so much? It affects how transactions are processed and approved:

• Bank decline rates: Many issuing banks auto-flag or decline MCC 7995 charges to protect themselves or due to local regulations. This leads to high decline rates for card deposits in some regions. (For example, U.S. banks historically declined many online betting transactions, and even as states legalize betting, some banks still refuse MCC 7995 charges).

• Card network rules: Card schemes require that online gambling merchants be properly licensed and categorized. Mastercard, for instance, mandates a gaming license and classification under MCC 7995 for real-money gambling sites. Visa has similar expectations, although in some cases unlicensed gaming might be shoehorned under other codes like 7994/7999 (gray area, not advised).

• Higher fees and reserves: Acquiring banks often impose higher discount rates (processing fees) for MCC 7995 merchants to offset risk. They may also hold a rolling reserve (e.g. 5-10% of turnover) as a buffer against chargebacks. Visa/Mastercard themselves charge acquirers premium assessment fees for high-risk categories, which get passed to the merchant.

During underwriting, gambling operators should be prepared for intense scrutiny. The acquiring bank’s risk team will evaluate the business’s license, financial stability, ownership background, and risk management processes. A history of excessive chargebacks or any hint of fraud is a red flag that can lead to denial.

Onshore Card Processing: Pros, Cons, and Use Cases

Onshore card processing refers to using acquiring banks and merchant accounts located in your primary operating country (or at least within the same region). For example, a UK casino using a UK-acquiring bank, or a U.S. sportsbook using a U.S. domestic payment processor, would be onshore.

Choosing an onshore strategy offers clear advantages, as it ensures regulatory compliance by operating under domestic financial regulations, which boosts credibility with both regulators and customers who value familiar banks and local oversight. Processing payments locally also means transactions settle in the native currency, eliminating conversion fees, simplifying accounting, and allowing direct access to domestic payment networks such as instant transfers and local debit systems. In addition, keeping transactions within one country reduces the complexity of cross-border payments and often lowers the perceived fraud risk, since banks tend to view transactions as safer when the merchant, customer, and financial institutions are all based in the same region.

Despite the advantages, onshore processing for gambling poses major challenges, starting with strict underwriting, as many domestic banks reject high-risk merchants like online gambling operators altogether, while those that do accept them impose rigorous due diligence and higher fees. Onshore accounts are also limited by jurisdiction, meaning operators can only serve players within that country’s regulatory framework; expanding globally would require obtaining multiple licenses and accounts across different regions. Additionally, regulatory restrictions on card usage further complicate matters—such as the UK and Australia banning credit cards for gambling, or the fragmented U.S. system where approval depends on state laws and even then some banks still decline transactions. These obstacles often result in lower card acceptance volumes than expected, forcing operators to maintain alternative payment methods.

Offshore Card Processing: Pros, Cons, and Use Cases

Offshore card processing involves setting up your merchant account and company in a foreign jurisdiction outside your main market. Common offshore processing hubs for online gambling include places like Curaçao, Isle of Man, Malta, Gibraltar, Kahnawake, and others known for gaming-friendly regulations. Many online casinos historically chose offshore strategies to navigate around strict laws or banking refusals in their target markets. Key advantages of an offshore approach are:

• Easier approval for high-risk merchants: Offshore acquiring banks and processors are generally more willing to board gambling businesses. These banks operate in jurisdictions where online betting is an established industry, so they have frameworks to manage risk without outright rejecting the merchant. If your domestic banks have turned you away, an offshore gambling merchant account can be a lifeline. Contact us for a list of offshore merchant account providers.

• Global reach and multi-currency support: Offshore accounts often support a wide range of customer geographies and currencies. For example, an offshore provider might allow you to accept players from Europe, Asia, and the Americas under one umbrella, offering payments in USD, EUR, GBP, etc. Many offshore merchant accounts come with multi-currency processing and currency conversion built-in. This flexibility is crucial if you operate in multiple countries or “gray markets” that lack local payment options.

  
  

Of course, going offshore is not a free ride; it comes with downsides and risks:

• Regulatory and reputation risks: Operating from an offshore haven can attract extra scrutiny. Regulators in your key markets may view offshore transactions as attempts to bypass local laws. There’s also a customer trust factor – some players might worry if they see an unfamiliar foreign company name on their card statement.

• Complex compliance and banking: Managing an offshore corporate structure means dealing with international tax reporting and varying compliance rules. You may need to hire experts to handle multi-jurisdictional AML/KYC compliance. Additionally, moving money across borders (settling your funds from the processor to your own bank account) can be slower or subject to additional compliance checks.

• Higher processing costs and reserves: Offshore merchant accounts for gambling often come with higher transaction fees or rolling reserve requirements, especially if you are a startup. It’s not uncommon to see discount rates of 4%–6% for card processing via a Curaçao gambling merchant account.

Navigating Offshore Jurisdictions (Curaçao, Malta, Isle of Man, etc.)

When pursuing an offshore payment strategy, choosing the right jurisdiction for licensing and banking is critical. Here’s a quick guide to a few popular jurisdictions and how they relate to card processing:

• Curaçao: Long-standing hub for online casinos. A Curaçao eGaming license is relatively fast and cost-effective to obtain, and it allows operation in many markets (except restricted countries) under one license. Many payment processors and acquiring banks are willing to work with Curaçao-licensed operators. However, Curaçao’s regulatory oversight is lighter, so operators must self-impose strong fraud controls to keep banks comfortable. Also, some European banks may be hesitant with Curaçao businesses, so processors might route transactions through intermediary banks in Asia or other regions.

• Malta: Malta’s Gaming Authority (MGA) is a top-tier license in the EU. A Malta license carries heavy compliance requirements and costs, but in return it grants a strong reputation. Onshore EU processing is much easier with an MGA license – many European acquiring banks readily support Malta-licensed operators under MCC 7995, often at lower fees. If your strategy is to target European customers, Malta is a favorable jurisdiction as it effectively counts as “onshore” for EU-wide payments.

• Isle of Man: Another reputable jurisdiction, known for robust regulatory standards and attractive tax benefits. Isle of Man licensees can access UK and global markets (with some restrictions) and often enjoy stable banking relations. Card processing through IoM can be efficient, but like Malta, expect thorough oversight.

• Other Jurisdictions: Gibraltar, Alderney, and Kahnawake (Mohawk territory in Canada) have also been popular for online gambling companies. Emerging options like Anjouan or Nevis are now offering licenses with less red tape, aiming to compete with Curaçao. Each jurisdiction has its pros and cons in terms of acceptance by payment providers. Generally, the more reputable the license (tier-1), the more banking options you’ll have on the onshore side.

Merchant Account And Payment Gateway Requirements

Whether onshore or offshore, the core requirements to obtain a gambling merchant account are similar.

Business and Licensing Documents: These include your gambling license certificate, incorporation documents, board resolution or memorandum of association, and evidence of good standing of your company. Many acquiring banks specifically ask for a copy of the gaming license and company registration as part of the application. Ensure these are up to date and certified if required.

Owner/Officer KYC: Every significant shareholder, director, and ultimate beneficiary will need to provide government-issued ID (passport), proof of address (utility bill), and often a personal bank account statement. Background checks will be run to verify there’s no fraud or criminal history.

Financial Statements and Processing History: If you’re an existing operation switching providers, have at least 3–6 months of processing statements ready to demonstrate your volume and chargeback rates. New startups won’t have this, so instead provide well-researched financial projections – expected monthly volume, average transaction size, player countries.

Payment Gateway Set-up: When setting up a payment gateway for gaming, it’s important to select one that aligns with both your business needs and the bank’s requirements. Key features include multi-currency and global card support to handle different currencies and process Visa/Mastercard payments worldwide with strong approval rates, as well as robust security and compliance through PCI DSS certification and 3D Secure 2 authentication, which helps meet regulatory demands like Strong Customer Authentication and shifts fraud liability away from operators.

The gateway should also offer effective fraud management tools such as velocity checks, device fingerprinting, geolocation, and even AI-based fraud scoring for real-time protection against suspicious deposits. While deposits are typically user-initiated, tokenization enables one-click re-deposits for a smoother experience, and recurring billing can support services like VIP memberships.

Finally, payout capabilities—particularly card payouts or “push-to-card” withdrawals—are becoming a valuable differentiator, as they allow operators to send winnings directly to players’ Visa or Mastercard quickly and conveniently.

Common Challenges in Card Processing

Even after you’ve set up card processing, gaming operators must continuously manage several industry-specific challenges. Below we discuss the major pain points:

High Charge Back Risk: Online gambling carries a high chargeback risk, often driven by players disputing legitimate losses as “friendly fraud” or fraudsters using stolen cards. To mitigate this, operators should implement 3D Secure on deposits to shift liability and deter fraud, use clear billing descriptors that players will recognize to avoid confusion, and keep detailed transaction records—including player IDs, timestamps, and IP addresses—to support chargeback disputes.

Additional safeguards such as chargeback alert services or insurance can provide early warnings and help operators resolve disputes before they escalate, while responsive customer support and straightforward refund policies can defuse legitimate complaints without involving banks.

Bank Reluctance: To build stronger relationships, operators should maintain transparency with their acquiring banks, proactively communicating about upcoming promotions or volume spikes to avoid alarming risk teams. Diversifying acquiring relationships is also essential, since relying on a single bank is risky; larger operators often maintain multiple merchant accounts, both onshore and offshore, supported by payment orchestration systems that route transactions across acquirers to improve approval rates and ensure redundancy. If you would like to get an up to date list of best card processors and banks, fill out our contact form and we will send it to you by email.

Conclusion

Setting up card processing in the gaming industry is essential but complex, requiring a balance between compliance, risk, and global reach. Onshore solutions offer trust and regulatory alignment, while offshore options provide flexibility and access to wider markets. Many operators succeed with a hybrid approach, combining multiple accounts across jurisdictions and using payment orchestration for broader coverage. Ultimately, the key is to stay compliant, transparent, and proactive in fraud management—turning the challenge of high-risk payments into a competitive edge.