Fantasy sports merchant accounts are custom payment processing services for online gaming businesses. With an increasing demand for online gambling and sports betting, new companies are seeing increased opportunities in the field. However, regulations are different for each state which makes the industry high-risk. To obtain credit card processing services, your fantasy sports company should work with a custom provider who knows the nuances of this changing legal landscape.
Fantasy sports is just one type of online gambling business. In this case, individuals pool their money and compete in various sports by selecting a team for the season. The top finishers are rewarded with a sum of prize money. Since Congress's decision to let states allow sports betting in 2018, online fantasy football, odds betting, and prop betting have become extremely popular. Ultimately betting on everything from fantasy football to baseball odds to hockey props is easy with online fantasy sports apps, and having a sports betting merchant account can streamline the transaction process.
Betting On Sports Online
Beyond fantasy sports, gamblers can choose to make bets for daily events and matches. This is a classic type of sports bet and is expanding to the online world. Certain providers of in-person sports betting believed this online capability would decrease the flow of tourists and gamblers at their facility. As such, Las Vegas casinos have spent significant amounts of money to keep online gambling at bay as long as possible.
The demand for gambling through the internet and via cell phone applications is too high to be staggered. Businesses with a new model or way of organizing bets are emerging constantly and so is the demand for payment processing services, particularly for high risk merchant accounts. These payments are unique because they not only accept money from customers, they serve to pay them whenever they are successful and win a bet. This is one major reason payment and credit card processors consider the fantasy sports industry high-risk.
Sports Betting Operators
Sports betting operators are larger organizations that give gambling websites and businesses the ability to run their company in states where it may not be allowed. State regulations are the name of the game. In order to operate a new business in this sector, be sure to look into the rules your state imposes.
If you're not lucky enough to be one of the few that has an open market in the industry, then you'll need to find an operator. Their role is to host smaller businesses and provide certain baseline standards in the gambling forum. Examples of major operators include DraftKings and Fanduel.
What Makes the Fantasy Sports Industry High-Risk?
Fantasy sports fall under the high-risk umbrella because of a few specific reasons. Making it essential to secure a fantasy sports merchant account for reliable payment processing.
Nature of the Industry: Any company that provides gambling or adult services is considered high-risk. Payment processing companies have always considered every company in these industries high-risk because of the type of business they do. Because fantasy sports companies fall under the gambling umbrella, they are considered high-risk businesses in a high-risk industry.
Age Restrictions and Other Regulations: Payment processors automatically consider the industry high-risk because gambling is highly regulated by state governments and the US federal government. If a company were to accept payments from someone underage or from a state that doesn't allow gambling, that would be a major issue. The risk of federal law and other regulations is a key reason every fantasy sports merchant is considered high-risk and it can be hard to get approved for an account.
The Betting System: As mentioned above, gambling companies, including fantasy football and others in the fantasy sports industry, have to have enough money on hand to payout when customers win their bet. They don't just accept payments like most companies; instead, the system of taking bets is much more complicated financially.
High Risk of Chargebacks: Fantasy sports merchant account providers worry about potential chargebacks when working with online sports gambling merchants. These can be costly for payment processors.
What is a High-Risk Merchant Account for Fantasy Sports?
Because fantasy sports are considered high-risk by merchant services providers, fantasy sports businesses will need to work with high-risk payment processing companies to accept payments. These high-risk providers understand the risks and are comfortable providing fantasy sports payment processing.
A fantasy sports merchant account from a high-risk provider often has higher fees to compensate for the risk. In exchange, they provide account access, chargeback prevention tools, fraud protection, and credit card processing. Talk to your high-risk payment processor about potential fees, including transaction and application fees.
It's also important to keep in mind that credit card processors consider online gambling businesses as the most high-risk merchants in the industry. Casinos have an advantage because they accept credit card payments from clients in person. You'll need to work with a fantasy sports merchant account provider who is okay with online transactions. Companies like Zen Payments have worked with merchants in the gambling industry for years, and are happy to help you get set up with fantasy sports payment processing and a merchant account.
Fantasy Sports Legal Opinion Letter
A legal opinion letter for fantasy sports used to be a necessary rite of passage for new companies. Traditionally, this required an attorney who would write a letter based on your business and provide all of these details about the functionality, fee structure, payment types, and what kind of gambling will take place. This could make it expensive and difficult to set up a fantasy sports merchant account.
Now, getting a fantasy sports betting account has become much more simplified. In cases where you need a legal opinion letter, some lawyers draft them quickly and they are no longer as costly as they once were.
Esports Payment Processing
Because of the emergence of Esports, many new fantasy sports-related businesses have emerged. Gambling for Esports is a new kind of online bet. No longer are sports limited to physical battles on the field, they've taken on huge growth with the popularity of mainstream games. The players are modern celebrities, and the bets are flowing. Beyond top-tier betting, there are also small wagers placed on one-on-one competitions which often take the form of in-game currency or loot. Esports fantasy sports merchants need fantasy football merchant accounts to process the bets.
Why Choose Zen Payments for Your Fantasy Sports Merchant Account?
If your fantasy sports business needs payment processing and a merchant account, Zen Payments is the team to trust. We have over 15 years of experience providing payment processing services to high-risk industries, including fantasy sports businesses. We will put together a customized plan for your fantasy sports business.
We'll get you approved and set up with a fantasy sports merchant account within one-two weeks. We know finding a fantasy sports merchant account provider can be difficult, but we specialize in high-risk accounts and have a 98% approval rate. You'll also have the option to talk to our experts whenever you need advice. Get set up with a fantasy sports merchant account today!
Josh Phelps is an experienced sales professional with eight years of expertise, including four years in payment processing. Throughout his career, Josh has successfully secured approvals for thousands of businesses, demonstrating his skill in navigating and optimizing the payment processing landscape.
