First Data is making a push into offline and online gambling payments processing, providing new services that cover a riskier set of transactions than those it already handles for businesses that operate casinos.

"This is taking an existing relationship and introducing a new product," said Jonathan O'Connor, general manager of alternative markets at First Data, which handles credit card payments for food and beverage sales in Las Vegas and Atlantic City. "We bring a one-stop-shop and a consolidated view of all of the different payment activities and types that a casino may have."

First Data's gambling platform, called PayLucky, launched this month to allow race tracks, lotteries, online gambling companies, Native American casinos and other gaming operations to manage payments from multiple users.

"Every new vertical presents risks," O'Connor said. "This is not retail merchant acquiring. It comes with a different level of requirements."

Much like marijuana dispensaries and gun shops, gaming establishments are legal but present risks not found in other industries. First Data plans to use anti-money laundering, 'know your customer' and geolocation tools to manage these risks, spot potential fraud as well as possible violations of the complex and frequently-changing mix of state and federal laws governing cross-state online gambling.

PayLucky will handle check, debit and credit processing, as well as guaranteeing player funds through third-party validation and analysis of spending habits. First Data is working with a number of partners, including Central Account Management Systems, which provides payment connectivity, geolocation and KYC services.

Its other partners include currency conversion specialist Fexco, cash management provider Global Cash Access, kiosk payment processing company NRT and security provider Secure Trading.

"We'll be able to look at the IP addresses of users to calculate where people are to adhere to location-based gambling regulations," he said. "We can also use that data to track usage to help casinos locate their best customers for special offers."

O'Connor has also worked with First Data's online poker clients, and this experience can inform his work with online and land-based casinos, he said.

In its pursuit of casino payments, First Data is taking on an industry that's "not for everyone," said Rick Oglesby, a senior analyst and consultant at Double Diamond Payments Research.

"Gaming is a bit different in that it involves a much higher level of cash, check and ATM processing than a typical merchant, and it involves a lot of international travelers," Oglesby said. "In addition, because it's about gambling it's a higher-risk merchant segment and convenience is very important—what is the quickest way for a player to get access to cash and get him or her back to playing?"

Also, since gaming occurs in a relatively small number of very large merchants, highly specialized services are required to get it right, Oglesby said.

"A whole suite of customized services is required," Oglesby said. "It's a potentially lucrative space for those who are willing to invest in creating and continuing to innovate these specialized services."

Given the risks, payments companies have been slow to embrace gambling despite the market's size. Companies such as Vantiv and Optimal Payments have introduced new platforms in the past year to win a share of the payments revenue coming from the gaming industry. 

Alternative payment providers and virtual-currency companies are also pursuing casino payments.

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