In the rapidly evolving landscape of sports betting, the legalization of this industry has opened up new horizons for businesses and consumers alike. With millions of dollars in revenue generated for states, it is an exciting time for the gaming industry. However, for sports betting merchants, navigating the complexities of categorizing transactions under the appropriate Merchant Category Codes (MCCs) and ensuring compliance with regulations presents unique challenges.

Credit card companies, such as Visa and Mastercard, require all online purchases to be coded, allowing them to identify the nature of the transaction and take necessary actions if it violates any legal restrictions. These codes are known as Merchant Category Codes or MCCs. 

In this informative blog post, we will delve into the main challenges faced by high-risk sports betting merchants when it comes to MCC codes and regulations. We will explore how these merchants can effectively navigate the intricacies of compliance, ensuring that their businesses operate within the legal framework while optimizing payment processing.

Background on Sports Betting

On May 14 2018, the U.S Supreme Court deemed the Professional and Amateur Sports Protection Act (PASPA) of 1992 unconstitutional, repealing it from federal law and opening the door for states to legalize sports betting across the country. A handful of states including New Jersey, Delaware, Mississippi, New Mexico, West Virginia, Pennsylvania and Rhode Island went ahead and introduced legal sports betting, joining Nevada which was exempt from the original federal ban.

Today nearly 35 states and the District of Columbia have legalized sports betting since the Supreme Court’s decision to overturn PASPA in 2018. Additionally, there are several others that are considering or have proposed legislation to legalize sports betting. These states include California, Florida, and Texas.

The legalization of sports betting has been a major boon to the gaming industry. In the five years since PASPA was overturned, the sports betting industry has generated over $220 billion in revenue and $3 billion in tax revenue for the states.

Understanding Sports Betting MCC Codes and Their Applicability

The four card networks – Visa, Mastercard, Discover and American Express – agreed on a framework for betting related MCCs: 7800 for lottery, 7801 for online gaming and sports betting, 7802 for horse racing or pari-mutuel, and then you have code 5816 for fantasy sports, which was assigned to Visa only.

An MCC reflects the primary category in which a merchant does business and may be used:

– to determine the interchange fee

– by card issuers to offer rewards for spending in specific categories

– by card networks to define rules and restrictions for card transactions

– for tax purposes

The first challenge for gambling merchants lies in comprehending the different MCCs and their relevance to their specific business operations. Each MCC represents a distinct category of gambling transactions, ranging from card-present gambling merchants to online gambling and horse racing. Gambling merchants must accurately categorize their transactions to ensure compliance with Visa’s guidelines and regulations.

MCC Description / Region Data Elements Use Cases / Examples
7995 In the U.S., this MCC is used for card-present gambling merchants and unregistered online gambling merchants.Outside the U.S., this MCC is used to capture all gambling transactions. Transactions DO NOT require an MVV and Visa does not validate an MVV in this MCC.For card present transactions, a quasi-cash/online gambling indicator may be present, if the type of goods (i.e. wager) sold can be easily converted to cash (e.g poker chips)For all card absent transactions in 7995, a quasi-cash/online gambling indicator must be present. Card present: A cardholder buys chips at a cashier window, presenting a card at the physical POSUnregistered online gambling merchant: a consumer places a wager at Bet365, online merchant based in the UK.
7800 In the U.S., this MCC is used for both card-present and card- absent lottery transactions for those merchants registered and verified by Visa. Transactions must include a Visa- issued MVV.Transactions will NOT include the quasi-cash/online gambling indicator A cardholder purchases a Michigan iLottery (internet) ticket or the Ohio Lottery sales at kiosks.
7801 In the U.S., this MCC is used for card-absent (mobile app and online) gambling transactions for those merchants registered and verified by Visa. All transactions must include a Visa-issued MVV AND the quasi- cash/online gambling indicator Consumers place a wager (or load their mobile gaming account) in a card-absent environment, if the merchant has been approved by Visa. Example: MGM or William Hill App
7802 In the U.S., this MCC is used for card-absent horse and dog racing for those merchants registered and verified by Visa All transactions must include a Visa-issued MVV and the quasi- cash/online gambling indicator Consumers place a wager (or load their mobile gaming account) to bet at the Kentucky Derby, IF the merchant has been approved by Visa. Example:

If you are unsure which MCC code to use, it is always best to consult with a payment service provider like TickleCharge that has a network of lawyers and fintech experts specializing in betting and gambling verticals.

Compliance with Enhanced Due Diligence Requirements

Complying with enhanced due diligence requirements is crucial for gambling merchants to maintain a valid MCC code and process legal transactions. 

Visa requires gambling merchants to be licensed and operated in a jurisdiction where online gambling is legal. Merchants must also comply with all applicable laws and regulations, including those related to anti-money laundering (AML) and know-your-customer (KYC).

Card networks also require gambling merchants to implement geo-location controls to prevent customers from accessing their services from jurisdictions where online gambling is illegal. These controls can be implemented using a variety of methods, such as IP address blocking, geo-fencing, and cookie-based tracking.

As part of compliance, gambling merchants must verify the age of all customers before they can participate in any gambling activities. This verification can be done using a variety of methods, such as driver’s licenses, passports, or government-issued ID cards. 

Meeting these requirements can be challenging, particularly for online gambling or sports betting merchants who operate across different jurisdictions with varying regulations. 

A reputable payment service provider like TickleCharge with experience working with gambling merchant accounts can help you comply with all applicable requirements. 

Obtaining and Maintaining a Merchant Verification Value (MVV)

One of the significant challenges for gambling merchants is obtaining and maintaining a valid Merchant Verification Value (MVV) required for specific MCCs, such as 7800, 7801, and 7802. The MVV is essential for authorization and processing of transactions under these MCCs. 

Visa mandates that gambling merchants register and complete an enhanced due diligence review to ensure compliance. Failure to obtain or maintain a valid MVV can result in transaction processing issues and non-compliance with Visa’s regulations.

By partnering with TickleCharge, gambling merchants can ensure smooth transaction processing, minimize compliance risks, and focus on growing their businesses within the legal framework. Our expert team is well-versed in the intricacies of MCC codes and regulations, helping merchants stay on the right side of compliance while maximizing transaction approval rates. 

We are already helping several high-risk sports betting merchants overcome complexities surrounding MVV acquisition and maintenance. Our comprehensive sports betting merchant account services include guidance and support in obtaining and maintaining the required MVV, simplifying the compliance process for our clients.

Differentiating Legal and Unregistered Online Gambling Merchants

When it comes to managing online gambling transactions, issuers have a tool at their disposal called Stand-In Processing (STIP). STIP allows issuers to make real-time decisions on whether to approve or decline transactions based on specific criteria. However, it’s important to note that STIP can only be utilized to block online gambling transactions falling under MCC 7995, which represents unregistered online gambling merchants.

Visa’s MCC 7995 encompasses both card-present gambling merchants and unregistered online gambling merchants. 

Identifying and distinguishing legal operators from unauthorized ones is critical to ensure compliance. For that purpose, payment facilitators too must register as a High Risk Internet Payment Facilitator with Visa before signing high-brand risk merchants. This registration helps Visa maintain complete oversight over payment facilitators and marketplaces, continuously monitor them, and affirm that they do not pose undue risk to the Visa payment system. Payment facilitators enter into payment services contracts with sponsored merchants and receive settlement funds directly from the acquirer (banks).

Challenging as it sounds, dedicated high risk payment service providers like TickleCharge have robust processes to verify the legitimacy of online gambling platforms, identify the right payment processors and prevent fraudulent activities.

Adhering to Quasi-Cash/Online Gambling Indicators

In the realm of gambling transactions, one crucial aspect that merchants need to be aware of is the quasi-cash/online gambling indicator. This indicator plays a significant role in distinguishing certain types of transactions and ensuring compliance with regulations.

For card-absent (online) gambling transactions, the quasi-cash/online gambling indicator is mandatory. This indicator helps identify and categorize transactions that involve online gambling activities. It serves as a signal to payment processors and card associations that the transaction falls within the realm of online gambling.

Interestingly, the quasi-cash indicator also comes into play for specific card-present gambling transactions. In instances where the goods purchased can be easily converted to cash, such as the acquisition of poker chips, the quasi-cash indicator is required. This indicator serves as a precautionary measure to identify transactions that may have the potential for cash-like value or quick conversion to cash.

However, it’s important to note that not all card-present gambling transactions require the quasi-cash indicator. For example, the purchase of a bingo card or a lottery ticket does not fall under the quasi-cash category. These transactions are recognized as specific types of gambling activities that do not possess the same cash-like attributes.

With our deep understanding of the intricacies of quasi-cash indicators and their implications for gambling merchants, we can provide comprehensive payment solutions and expertise in high-risk merchant services.


Gambling, online gaming, and sports betting merchants face several challenges in navigating MCC codes and complying with regulations in the evolving legal sports gambling landscape. 

But TickleCharge’s specialized expertise in high-risk MCC codes, enhanced due diligence review and compliance support, streamlined MVV management, fraud prevention tools, chargeback management solutions, and proactive monitoring of regulatory changes makes it an invaluable partner for high-risk gambling merchants. 

With TickleCharge’s assistance, high-risk gambling merchants can navigate the complexities of MCC codes and regulations while focusing on their core business objectives. 

A knowledgeable payment partner can be a big boost for business owners to overcome above highlighted challenges and operate successfully within the bounds of the law.

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