Related Questions
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An offshore gambling operator approaches with a Curacao license and claims they block US customers. For CROs, Heads of Risk, and Compliance leaders, the question isn't whether offshore operations are automatically problematic. The question is whether the operator can prove geo-enforcement, or if "we block US" is a policy statement without technical substance.
Offshore is not automatically bad. It is automatically higher burden of proof.
UIGEA liability flows to processors.
The Unlawful Internet Gambling Enforcement Act (UIGEA) prohibits payment processors from knowingly accepting payments for unlawful internet gambling. If an offshore operator serves US customers without state licenses, processing their payments creates direct UIGEA violation risk.
Recent enforcement actions demonstrate that "we didn't know" is not a defense. Processors named in state Attorney General actions despite operator claims of US blocking.
Card scheme scrutiny is increasing.
Visa and Mastercard are escalating enforcement of gambling transaction rules. Operators targeting restricted markets without proper licensing face merchant account terminations, and processors face compliance reviews and potential fines.
The burden of proof has shifted.
Offshore operators claiming US exclusion must now provide testing evidence, third-party audits, and transaction data verification. Policy statements alone create unacceptable risk.
The comprehensive guide outlines a six-part verification framework built from real-world compliance analysis:
Multi-layer blocking is non-negotiable. IP blocking alone is insufficient because VPNs bypass it easily. Operators must implement IP blocking with VPN detection, payment method BIN blocking (rejecting US-issued cards at authorization), document verification at KYC (automated rejection of US IDs), and GPS device location verification for mobile apps.
Key insight: One US chargeback proves blocking failed. Zero US chargebacks over 12 months validates effectiveness. Testing protocol requires VPN penetration attempts, US card authorization tests, and mystery shopping with US documents.
Pre-deposit KYC means compliance priority. Post-deposit KYC means revenue priority. If US users can deposit, play, and lose without verification, that's accepting US customers regardless of policy claims.
Key insight: Withdrawal-triggered KYC is deliberate. Verify losers never go through KYC while winners are blocked and funds confiscated. This is selective enforcement, not compliance.
Even with geo-blocking, some US users slip through. Transaction monitoring must flag US indicators automatically (IP-payment mismatches, time zone anomalies, US phone numbers) and block transactions, not just queue for review.
Key insight: Chargeback pattern analysis is definitive. If geo-blocking works, US-issued card chargebacks should be zero. Multiple US chargebacks indicate systemic blocking failure.
Offshore licenses (Curacao, Malta, Gibraltar) authorize operation in licensed territory only. They explicitly prohibit serving restricted jurisdictions. Operators must demonstrate they're NOT serving US customers through geo-blocking enforcement.
Key insight: Curacao license plus US targeting equals critical risk. Malta Gaming Authority and UK Gambling Commission require proof of geo-blocking for restricted markets, but even these strong licenses don't authorize US operations without US state licenses.
Payment processor relationships reveal compliance standing. Long-term relationships (2+ years) with Tier-1 processors indicate legitimate operations. Frequent processor changes (every 6-12 months) signal terminations for compliance issues.
Key insight: Cryptocurrency-exclusive operations often indicate difficulty securing traditional processors due to compliance concerns. Stable processor relationships with OFAC screening programs reduce risk.
Past behavior predicts future behavior. Search state Attorney General complaints, Better Business Bureau, Reddit gambling communities, and Trustpilot for US user patterns.
Key insight: US users openly discussing site access on forums proves blocking doesn't work. Complaints about "account closed when trying to withdraw" prove post-deposit selective enforcement.
The guide provides a detailed compliant profile benchmark:
This profile represents acceptable risk for payment processing (assuming no US market targeting).
The guide identifies high-frequency errors in underwriting:
"We block US" without testing evidence. Every offshore operator claims blocking. Policy statements mean nothing. Require penetration testing reports showing US access blocked, third-party audit certification, transaction data showing zero US cards, and KYC rejection statistics (X US IDs submitted, 100% rejected).
Marketing-operations gap. Operator claims US blocking while running US-targeted Google Ads, using affiliates with "USA" in domain names, featuring US sports prominently, and accepting USD as primary currency. Why market to a demographic you prohibit?
Reactive rather than preventive blocking. Blocking occurs after deposits (often only at withdrawal). If US users can deposit and lose without verification, that's accepting US customers. Operator keeps deposits from US losers while blocking US winners.
Additional red flags. Reluctance to provide chargeback data by card country, frequent payment processor changes, cryptocurrency-only operations, no named compliance officer, regulatory warnings from license issuer.
This framework enables you to:
The guide includes step-by-step verification protocols, testing procedures (VPN penetration, card authorization, mystery shopping), chargeback analysis methodologies, and merchant assessment checklists with quantified risk thresholds.
The complete guide provides operational checklists, testing scripts, regulatory source documentation, and verification protocols. It's designed for immediate implementation by underwriting and risk teams evaluating offshore operators.
For payments platforms managing gambling merchant portfolios, this resource delivers the structured verification framework needed to distinguish operators with genuine US blocking from those with performative policies before UIGEA violations become a compliance issue.
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