Chargebacks (Under review)

A chargeback in the context of an online casino is a process initiated by a player to reverse a payment made to the casino, typically through their bank or payment provider. This usually occurs when a player disputes a transaction, such as a deposit, claiming it was unauthorized, fraudulent, or otherwise unsatisfactory.

Here’s a breakdown of how the chargeback process works for an online casino:

1. Player Initiates the Chargeback Request

• The player contacts their bank or payment provider (such as a credit card company) and requests a reversal of a specific transaction.

• The player must provide a reason for the chargeback, such as unauthorized charges, failure to deliver promised services, or dissatisfaction with a product.

• In the case of online casinos, players sometimes claim a chargeback due to “gambling addiction,” attempting to recover lost funds by stating that the deposit was made impulsively, or unrecognized charges due to names of the merchants and descriptors.

2. Bank or Payment Processor Investigates the Claim

• Upon receiving the chargeback request, the bank or payment provider temporarily credits the disputed amount back to the player’s account and notifies the casino's processor of the claim.

• The casino then has a specific time frame, typically between 30 to 45 days, to respond to the dispute.

3. Casino’s Response to the Chargeback

• The online casino has the opportunity to dispute the chargeback by providing evidence that the transaction was valid. Evidence may include:

  • Records showing the player’s account activity and agreement to the casino’s terms and conditions.

  • Transaction history showing the player’s deposit and play activity.

  • IP address records, location data, or other identifiers that verify the player’s account and login details.

  • Communication logs (such as emails or chat transcripts) between the player and customer support.

• If the casino fails to provide sufficient evidence within the given time, it risks losing the funds.

4. Decision by the Payment Processor or Bank

• The payment provider or bank reviews both sides of the case and decides whether to uphold or reverse the chargeback.

• If the decision favors the player, the bank completes the chargeback, and the funds are permanently removed from the casino’s account and credited back to the player.

• If the decision favors the casino, the chargeback is canceled, and the player’s account is re-debited.

Impact on the Casino

• Financial Loss: If the chargeback is approved in favor of the player, the casino loses the disputed amount. Additionally, most payment processors charge a fee for each chargeback (e.g., $15–$50), regardless of the outcome.

• Reputation and Account Risk: High chargeback rates can harm the casino’s relationship with payment providers, who may increase fees or impose stricter requirements, and in extreme cases, may suspend the casino’s account.

• Increased Scrutiny on Player Accounts: Casinos often monitor accounts that have a history of chargebacks, which could result in limited deposit options or even account suspension for players who repeatedly initiate chargebacks.

Preventive Measures

• Clear Terms and Conditions: Ensuring that players understand terms, especially around bonuses and withdrawals.

• Verification Processes: Requiring players to complete identity verification (KYC - Know Your Customer) to deter fraudulent activity.

• Deposit Limits and Responsible Gaming: Offering tools for players to set deposit limits, cooling-off periods, or self-exclusions to prevent impulsive gambling.

• Customer Support and Dispute Resolution: Encouraging players to first seek resolution through internal channels, providing prompt support to address issues and avoid chargebacks.

Sometimes, casinos can recur to IOvation, for example, to exert their own right to black list a customer for other online businesses in case of fraud or chargebacks.

IOvation protects online businesses and their end users against fraud and abuse, and identifies trustworthy customers through a combination of advanced device identification, shared device reputation, device-based authentication and real-time risk evaluation.

Define procedure for these cases and if iovation is an option.