The Reality Behind Getting a Fantasy Football Betting Merchant Account
The sheer volume of information available for sports betting is staggering. The number of guides for betting strategies such as hedging your bet, sports arbitrage, and sport-specific statistics makes sports betting advice websites a very lucrative business.
As preseason football games begin airing, diehard fans and other sports enthusiasts study current and past season games, research stats, what out for trades and injuries and doing whatever else they can to start preparing for draft day. Not the nationally-televised draft, the one planned with friends and family. In the United States, grown men and women pretend they are owners of imaginary professional sports team that they create on their draft days. Fantasy sports, specifically fantasy football, not only has become a beloved tradition in the states but a popular new way for people to gamble.
Fantasy football has grown steadily since its beginnings in the 1990s. According to the Fantasy Sports Trade Association, more than 44 million fantasy sports players entered the market between 2003 and 2017. In 2017, there was an estimated 59.3 million players.
The fantasy sports industry is estimated to reach $7 billion in the United States and Canada this year, according to the association. The average annual spending per fantasy player is $556. The money is spent on league-related costs, single-player challenge games, and league-related materials during a one-year period.
Fantasy sports relies heavily on computers and mobile devices. In 2016, 39% of fantasy game players use a mobile device primarily to draft a team, check scores, change a lineup, and research players, according to the association. That number is up 14% from 2012. On average, the play three times per month during all sports seasons. That’s why it is crucial that fantasy sports betting businesses can process credit card transactions.
Despite its popularity and its money-making potential, most traditional financial institutions would rather pass then go in and tackle the nuances that come with approving a fantasy football betting merchant account. The industry’s background and history and excessive chargeback ratios keep banks from approving fantasy football betting merchant accounts.
eMerchantBroker.com (EMB) is in the game and ready to help merchants process credit card payments effectively and efficiently. Specializing in providing high-risk merchant accounts for fantasy sports businesses, EMB offers customized payment processing solutions for all types and sizes of companies.
To begin the process, apply online now for a fantasy football betting merchant account. Merchants can get approved in as little as 24 hours. Once approved, EMB can set up chargeback management tools and a payment gateway. A fraud filter also can be set up for online payments.
Merchant accounts for all fantasy sports betting
Fantasy football, which includes both professional and college games, is the most popular type of virtual sports betting. In additional to fantasy football betting merchant accounts, EMB approves accounts other these other fantasy sports:
Most importantly, EMB works with new and existing businesses, merchants that have rejected or terminated by other credit processors, as well as those with bad credit, no credit, or a history of excessive chargebacks. EMB wants businesses to succeed. This happens with EMB’s dedication to customer service.
What’s needed to get a fantasy football betting merchant account
To obtain a fantasy football betting merchant account, businesses must begin by filling out EMB’s simple online application. After submitting the application, merchants will need to provide the following items to underwriters for review:
- A valid, government-issued ID, such as a state-issued driver’s license
- A bank letter or a pre-printed voided check
- 3 months of the most recent bank statements
- 3 months of the most recent processing statements, if applicable
- A SSN (Social Security Number) or EIN (Employer Identification Number)
- A secure, fully-operational website with trusted privacy and refund policies
- Chargeback ratios must be under 2%
EMB cannot guarantee an approval, but it does promise applicants a quick, fair, and secure process. At EMB, the staff is dedicated to helping their customers operate and succeed in in their businesses. Apply today and get approved as little as 24 hours and begin processing credit card payments.
What to expect during an underwriter’s merchant account review
The ultimate key to getting a fantasy football betting merchant account is for a business to be operating a law-abiding, trustworthy, reputable company. Questionable business dealings, a flawed business model, and a past checkered with too many chargebacks will hurt any merchant’s chances of getting an account.
During their review, underwriters determine risk. They look at many factors to ensure credit card processors will not be unnecessarily financially burdened by fantasy sports merchants, which are considered high risk. In the end, they want to know that merchants have a good business model that won’t result in a high volume of chargebacks and refunds that eventually become the responsibility of processors.
Factors that determine a business’ risk include:
A history of high chargeback (credit card transaction disputes) ratios
- Bank statements
- Credit card processing history
- Credit scores
- Negative bank account balances
- Unpaid bills and late payments
Other things that help include having a principal in the business with a good credit history apply for the account. Merchants should also pay any outstanding debts, and have some money in the bank before an underwriter’s evaluation. The time before a review is when businesses need to take care of anything suspicious.
Though no approval is guaranteed, taking these steps can increase a merchant’s chances of obtaining a fantasy football betting merchant account approved. Putting a business in the best possible light also may limit an underwriter’s restrictions, such as higher processing volume caps or a lower rolling reserve.
Law states: fantasy sports take skills, and that’s a good thing for merchants
The Unlawful Internet Gambling Enforcement Act of 2006 is a federal law aims to ban games of chance, like online poker. Though people often lose money betting on virtual teams, fantasy sports was excluded from the law because it was a game of skill instead of a game of chance. Fantasy sports sidestepped the law because betting on virtual football and other sports requires gamblers to know about players’ performance. What the law really does is prevent a person or entity from “knowingly” accept money associated with a person participating in illegal online gambling. This has no real consequence for an actual gambler since the law focuses on a party not accepting funds. Basically, this means gaming merchants can’t legally accept wire transfers.
Despite this law and the laws of individual states, fantasy football betting merchants can lawfully operate, but banks continue to see them as unnecessarily risky financial endeavors. Luckily, businesses can get credit card payments processed by applying to EMB for a fantasy football betting merchant account. EMB works to get a payment solution that suits each individual business. Take a shot and fill out EMB’s online application today.
Don’t hate the player, hate the game – Why banks don’t want the risk
Processors are taking on a great deal of risk when they decide to approve a fantasy football betting merchant account. It basically comes down to three risks: financial, reputational, and regulatory risks.
When merchants pay their monthly credit card processing bills late or accrue and then default on the cost of excessive chargebacks, processors are left holding the bag. Processors are liable for any funds merchants don’t pay. So, when underwriters review fantasy football betting merchant accounts, they try to determine how likely businesses will rack up chargebacks and who won’t pay their bills.
The government’s regulations on fantasy sports and gaming are strict. Though merchants are responsible for running legitimate businesses, processors share some of the liable if they are skirting the laws. This is another reason why these businesses are high risk. To protect themselves, processors must work hard (and pay more money) to check and ensure that merchants are following the rules.
Finally, credit card processors need banks to sponsor them. Banks are very protective of their reputations, so they don’t want anything to put them in a poor light. To keep the public’s perception high, they will avoid businesses that often are looked at as undesirable, such as those related to gambling. Though, for the most part, the public has embraced gambling and fantasy sports, banks remain very cautious.
The nature of the payments fantasy sports takes also increase their risks to processors. Fantasy football betting and gaming take online or mail order/telephone order (MoTo) payments. These methods of payments are riskier because they are more vulnerable to fraud.
Why are there so many chargebacks? Not everyone is a winner
It is simple. When people play a game on the field or behind a computer, that person is taking a chance. Winners walking away with bragging rights and maybe a cash bonus and losers just walk away. Many chargeback are due to sore losers. When gamers lose money, some try to avoid paying for their losses by disputing the credit card transaction, resulting in a chargeback.
Gaming and fantasy sports also is an expensive industry. When most people place a bet, they often go big before they go home. Once they see expensive charges on their card statements, they get buyer’s remorse. What this is really called is friendly fraud. Basically, people abuse the chargeback system so that they can play games or bet for free. Unfortunately, industries that sell higher-ticket items or services get targeted more often.
Stop gambling with business, cut chargeback ratios
Avoiding chargebacks is the number one way to successfully run a fantasy sports betting business.
Credit card processors can terminate fantasy football betting merchant accounts that have more than 3% chargeback ratios. The real kicker is that once they have been terminated, it is very difficult to get another merchant account.
Security is very important when it comes to fantasy sports transactions since they are done electronically via phones and computers. To prevent customer fraud, merchants need to ensure they are using secure channels and keeping details of every transaction. Purchases should be recorded, archived, and easily retrievable. The exact dates and times of transactions, and the IP address of the computer from which the purchase was made should be known in case there is a dispute. This information can be used to fight a dispute.
In addition to these steps, businesses should be ready to offer full refunds immediately to dissatisfied customers. Refunds are more cost-effective than excessive chargebacks.
Clearly displaying business names and contact information on all emails, websites, promotional material, and receipts also are perfect ways to prepare clients for what they will see on their credit card statements. This often avoids customers contacting credit card companies about purchases they don’t recognize or remember a purchase.
Additionally, sending an automatic email receipt once a transaction is complete also helps remind customers of transactions. In the case of fantasy football gambling, it also is a good way to bring them back to a site to bet again.
The best way to tackle chargebacks
Whether chargebacks are won or lost, they hurt merchants. Merchants that don’t try to prevent chargebacks are setting themselves up for failure and damaging their abilities to conduct business in the future. Merchants that don’t maintain ratios below 2% can have their fantasy football betting merchant accounts terminated by processors.
Using a chargeback mitigation program, like the one offered by EMB, is one of the best ways to slash chargeback ratios by as much as 25%. This means six out of every 24 potential chargebacks can be mitigated by using this Chargeback Shield.
Specifically created for high-risk merchants, such as fantasy sports betting businesses, EMB’s superior alert and prevention system, provides merchants with a system that allows businesses to resolve credit card transaction disputes directly. This works because EMB partnered with Verifi and its new Cardholder Dispute Resolution Network (CDRN) and Ethoca’s alert system. CDRN works directly with card issuers and banks, which allows merchants to achieve the highest rate of chargeback resolutions.
Consider this a win-win situation for merchants and processors. Merchants keep ratios where they need to be and EMB keeps their merchant accounts active.
Fantasy football betting categories
Numerical Standard Industrial Classification (SIC) codes are assigned to all businesses, including fantasy football betting merchants, by the United States and other countries throughout the world. These codes identify the primary purposes of these businesses.
Sports betting, fantasy football, and gaming use a wide vary of SIC codes, including:
- 799913: Sports Forecasting and Lottery Services
- 7999: Amusement and Recreation
- 7374: Computer Processing and Data Preparation
- 79991301: Bookmakers
- 79991302: Sports Forecasting Establishment
- 7997: Membership Sports and Recreation Clubs
Visit the United States Department of Labor to view a complete SIC list.
Federal statistical agencies classify establishments, which are used to collect, analyze, and publish statistical information about similar types of businesses, uses a list of six-digit numerical codes known as the Northern American Classification System (NAICS). The data gathered is used to determine the way the businesses impact the U.S. economy
Typically, fantasy sports and gaming-related merchants use one of these codes:
- 561410: Gaming and Fantasy Sports
- 518210: Data Processing and Related Services
- 611620: Sports and Recreation Instruction
- 713290: Other Sports Forecasting Industries
- 713990: All Other Amusement and Recreation
Visit the United States Census Bureau’s Northern American Classification System to view the complete NAICS code list.
Sports Betting Advice Merchant Accounts
Get your inside information regarding merchant service providers for sports betting sites. Choose eMerchantBroker as your sports betting advice merchant account provider. We can help get your merchant account set up in as little as 24-48 hours.
A good business providing excellent advice can become known quickly as more gamblers create more traffic for your website. A merchant account in order to process electronic payment is a required aspect of any sports betting advice company. Yet, as all gambling-affiliated services are, banks and traditional merchant service providers will stay at arm’s length from a high risk endeavor such as sports betting advice.
Begin the application process today and we with all the supporting documents and signed agreement, we can have you set up with a merchant account in as little as 3 days.
- No Application Fees
- Competitive rates
- No VISA/MasterCard Required
- Secure Payment Gateway