Headache of Online Gambling & Its Treatment

A critical issue in online gambling is transaction pass-through (i.e. whether payments from players successfully go through). If a player’s deposit fails or withdraw­al is blocked, that often means they’ll leave that casino for one without such problems. It’s not enough to have a license — you also need payment systems and legal structures that ensure high acceptance of payments and a good user experience.

The Problem

Obtaining a gambling licence (whether in demanding jurisdictions like the UK or Japan, or more lenient ones) is just step one. A big challenge remains: ensuring that when a player tries to deposit, payments are accepted (internet acquiring), and when they want to withdraw winnings, the process is smooth and reliable.

For many operators licensed in more “offshore” or lenient jurisdictions, issues arise because major card networks (Visa, Mastercard) or European banks may decline transactions to their accounts, especially if the operator isn’t based in a regulated EU country. The so-called “MCC code 7995” (gambling transactions) or codes like that can trigger scrutiny. If the bank or payment processor sees that code and the destination is outside their accepted risk framework, they may block or reject the transaction. This frustrates users and reduces trust.

Solutions & Legal Schemes

Here are some fully legal ways operators use to improve transaction pass-through and payment reliability:

1. European subsidiary / EU entity structure
   Create a subsidiary in a well-regulated EU jurisdiction (commonly Malta, Cyprus). This company is 100% owned by the main licence-holding operator.
   Agreements are set up such that the EU subsidiary accepts payments on behalf of the parent, disburses funds as instructed, etc. It acts as payment recipient (agent) even though legal ownership/control is clearly defined. Because this entity is under EU regulation, banks, card networks, and payment processors are less likely to reject gambling-related MCCs.
2. Dual licensing (gambling license + financial services license)
   In some cases operators maintain separate entities: one holding a gambling license, another licensed for financial services (or payment services) so that transactions flow through the financial-licensed company. This can help avoid problems with MCC codes and regulatory issues.
3. Using reputable payment processors / e-wallets / crypto gateways
   Payment services like Skrill, Neteller, or other compliant digital wallets often have more flexible risk acceptance, especially if tied to a well-licensed entity. Use of cryptocurrency is sometimes employed, though regulatory risk remains higher.
4. Transparent compliance, AML / KYC, and risk disclosure
   Ensuring that all KYC, AML, identity verification and documentation are solid. When banks or card issuers see that compliance standards are met, the likelihood of blocking drops. Also, clear disclosure of how the transaction works helps reduce chargeback & fraud risk.
5. Own branded bank cards or branded wallet accounts
   Some operators give loyal players their own branded prepaid or debit cards, issued under financial license, which lets them spend winnings more directly (less friction in withdrawals), bypassing some of the typical bank-processor rejections.

What’s Changed in 2025

• Malta introduced Bill 55 / Article 56A, which in some cases allows Maltese-licensed gaming operators to avoid enforcement of foreign court judgments that conflict with Maltese gaming law. This has stirred debate with the EU about cross-border legal enforceability. 
• Regulatory pressure in Europe has increased. New rules are being introduced around player protection, transparency of charges, higher levies, stricter ad rules, etc. This means financial compliance and formal structures are more important than ever. 
• The NIS-2 cybersecurity directive in the EU has been extended to cover more digital service providers, including gambling operators in some cases, meaning operators must also comply with stricter cybersecurity, data protection, and incident reporting demands.

Recommendations (2025-ready)

• Ensure you have an EU-based entity with gambling license and ideally also financial / payment license. Malta remains popular but is under scrutiny.
• Make sure all payment partners are vetted, know your licences, compliance, and structure.
• Monitor laws in target markets. What was legal before may have new restrictions.
• Build reputation: low number of payment failures, quick withdrawals, visible proof of payout speeds / user satisfaction helps retention.
• Maintain strong KYC/AML policies — more regulators and banking partners require this up front.

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