U.S. consumers are looking beyond shopping on Amazon or watching Netflix to entertain themselves as they comply with ongoing stay-at-home orders. Many are instead flocking to online gambling sites after the closure of all 989 commercial and tribal casino properties in the U.S.
Most of these gamblers are looking for quick games and wins that can provide them with more funds to spend. However, it can take a long time for online players to collect funds, unlike at casinos, where consumers can instantly collect winnings in cash.
A growing share of gambling customers expect wins to clear in minutes, rather than days, and are not willing to wait up to five days for automated clearing house (ACH) settlements to clear, Mickael Marceau, head of payments for Kindred Group, said in a recent interview with PYMNTS. Kindred Group operates the online casino and sportsbook service Unibet. Marceau explained that customers may even prefer paper-based payments to digital mechanisms that are too slow, since picking up checks or vouchers in brick-and-mortar casinos means gamblers can cash them out in person. This is a typically a boon for casinos because customers with fast access to their winnings can potentially bet more.
“The challenge that we have today with U.S. [gambling] payment mechanisms is that ACH payouts are not instant,” Marceau said.
ACH payments, the most common way to pay customers, take approximately three to five days to clear, he said, and that time estimate does not include delays caused by the identity verification processes that online gambling platforms must conduct to ensure money is going to the right people. These factors create an experience that is often far from what customers expect, he said.
Unibet has looked to solve this by giving customers more choice in payments, offering disbursements via ACH, credit and debit transfers, digital wallets and even cash and checks when requested. The platform is now searching for instant disbursement solutions that can better meet customers’ desire for instant gratification. Kindred Group, which also supports gambling platforms in Europe and Australia, has been operating its Unibet brand in New Jersey and Pennsylvania for about a year. The ways gambling winnings can be paid out in the U.S. differs widely from how they can be disbursed in Europe, Marceau said.
US Payments Are Playing Catch-Up
U.S. consumers are just as fond of digital payments as those in Europe, but they often do not enjoy the same level of choice and convenience. While checks only account for approximately 3 percent of Unibet’s disbursements in the U.S., the vast majority of other payouts are handled by ACH or prepaid cards, which are relatively faster but do not support instant funds access. The U.S. payments market is behind that of Europe, but U.S. consumers’ expectations have already caught up, Marceau said.
“The client expectations in the U.S. and Europe are similar; they want their money instantly,” he said. “The payment mechanism behind providing that is completely different between the two continents, however.”
Unibet is looking to bridge that expectation gap by bringing the quick disbursements support currently enjoyed in Europe to the U.S., he added. Thirty percent of winnings in Europe are paid out through what is known as “back to the card” payments, which means funds are sent right back to the credit or debit cards consumers used to buy credit on Unibet’s site. This is something the company will be looking to bring to the U.S. in the next year.
“There is no mechanism [in the U.S.] where you can send original credit transfers,” Marceau said. “Today in Europe, we have that [and] it is working well. This definitely would be extremely good and also extremely safe for U.S. clients. You deposit with your card and then the money goes back to the card you used, so [the method] will have a double effect of reducing potential fraud and [improving] user experience.”
Enabling faster disbursement options in the U.S. is not as simple as just building out the technology stack, however. Companies like Unibet must also be aware of changing regulations regarding online betting that can limit how fast and how far firms can innovate. The U.S.' regulatory ecosystem for online gambling is much different and much younger than its counterpart in Europe, and gambling platforms must be familiar and compliant with these regulatory distinctions before they roll out access to new payout options. This can slow down progress.
Regulatory Hurdles Trip Up Disbursement Innovation
Complying with U.S. gambling regulations and enabling access to faster disbursements can be particularly challenging as laws in these areas can change dramatically from state to state. Unibet is thus approaching new disbursements innovation methodically, Marceau said.
“There are [U.S.] banks that do not have the ability to [process] gambling [transactions] across states,” he explained. “[This] means that though we have licenses in Pennsylvania, we do get players that are rejected by [their] bank because [the bank does] not have this functionality and [then] cannot differentiate from New Jersey, where we are fully licensed, and California, where we do not have a license.”
This inconsistent regulation represents a massive challenge to gambling payout innovations for U.S.-based customers, Marceau said, and Unibet and other gambling platforms will likely need to work around it for the next few years.
Meanwhile, U.S. gambling customers will likely continue to want instant access to their winnings. Seamless and instant disbursements access will likely become a top differentiator for online gambling platforms looking to compete in the country.