Citibank, the nation's largest credit card issuer, has agreed to block all online gambling transactions that use 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.
"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% of the nation's credit card market.
"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.
Citibank also agreed to pay $400,000 to nonprofit groups that counsel and help families hurt by gambling addictions, the company said.
Lawmakers in Washington have been trying to ban Internet gambling since 1996. The task gets more difficult each year as the industry grows.
News source: USAToday - Citibank to block Net gambling transactions
