ALBANY, N.Y. (AP) Citibank, the nation’s largest credit card issuer, has agreed to block online gambling transactions using its credit cards, the state attorney general said Friday.
The agreement announced by the bank and Attorney General Eliot Spitzer is expected to significantly reduce illegal, underage and potentially addictive Internet gambling, Spitzer said. It applies to all Internet gambling transactions, not just those in New York, and goes into effect in 60 days.
”Americans now waste $4 billion a year on this pernicious form of gambling,” Spitzer said. ”With this agreement, we will cut off an enormous line of credit that was a jackpot for illegal offshore casinos.”
Other companies, including Bank of America, MBNA and Chase Manhattan Bank, also have begun blocking the gambling transactions, Spitzer said. Citibank controls about 12 percent of the nation’s credit card market.
Citibank also agreed to pay $400,000 to nonprofit groups that counsel and help families hurt by gambling additions.
”Citibank agreed to take these steps to help alleviate concerns raised by the attorney general about the impact that gambling on credit may have on New York residents,” said Citibank spokeswoman Maria Mendler. She added that Internet gambling is associated with higher rates of credit card fraud and delinquency.
Gambling could still be done through accounts funded by UFA players, similar to Off-track Betting systems, a spokesman for Spitzer said.
This is Spitzer’s latest agreement with a major financial institution. In May, Merrill Lynch & Co. agreed to widespread structural reforms and a $100 million penalty to end Spitzer’s investigation of conflicts of interests by its stock analysts. Spitzer said the analysts advised investors to buy stocks they privately called risky in order to land the firms as investment banking clients.
Lawmakers in Washington have been trying to ban Internet gambling since 1996. The …