Games of Skill Merchants: Payments Best Practices
Blog post from Basis Theory
“Games of skill” merchants, including daily fantasy sports and skill-based eSports platforms, are generally classified under MCC 5816 and treated as high-risk by payment providers because they involve real-money wagers, prizes, and potential regulatory overlap with gambling. Unlike gambling, which is primarily chance-based, games of skill are intended to depend mainly on player knowledge or strategy, though merchants must carefully limit chance elements to avoid gambling classification and related geographic restrictions. Visa’s Integrity Risk Program identifies card-absent games of skill as a Tier 2, high-brand-risk industry due to risks including chargebacks from regretted or unauthorized payments, customer disputes, fraud, regulatory concerns, and potential player addiction. Recommended practices include understanding applicable rules, using payment processors experienced with high-risk merchants, clearly communicating billing and cancellation terms, maintaining strong customer support and PCI DSS compliance, monitoring transactions for fraud or harmful behavior, and engaging specialized compliance and security partners. Basis Theory promotes its tokenization, card-data, and payment-routing tools as a way for such merchants to reduce PCI compliance burdens, retain control of payment data, and avoid reliance on a single processor, citing creator platform Passes as an example of a business that used its services to build more flexible payment-provider options.
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