Thursday, March 23, 2006

Boom and Bust

The Times recently ran an interesting article on changes to the way credit card users are charged for making deposits at online gambling sites.

On the boom side, it's worth noting that one of the most prestigious UK newspapers now has a dedicated poker section. A sign of the times indeed.

On the bust side, I wonder what effect this change will have on the amount of cash deposited online.

Until now, companies have treated deposits as purchases. So putting $500 into PokerStars was treated by the card companies in just the same way as buying a new DVD player online.

This means the customers were eligible for any special deals offered by card providers.

As a personal example of this, when I applied for an Egg card to take advantage of an interest free for 9 months deal, they gave me a credit limit of £15,000 - that's roughly $25,000. Without me asking!

Had I chosen, I'd have been free to 'invest' that cash in an online poker room for 9 months free of charge. Now, being a sensible type, that thought would have been momentarily tempting, but swiftly discarded.

Is everyone so smart, I wonder? How many players have been living it up at the tables, gambling on borrowed money.

Those players who might previously have been taking advantage of free, or near free, money to gamble with, will be hit with interest charges of around 20%

Of course, one could argue that anyone daft enough to borrow from their credit card company to play online, is probably daft enough to pay the charges too. I just don't know.

But it is certainly another hindrance to the free flow of money into the online games. As well as being another example of why an online wallet like Neteller is such an essential tool for the online poker player.

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