Visa Bows to Haines

If you're the proud owner of a Visa card, you might soon receive a letter stating: "Internet Gambling Advisory: Internet gambling may be illegal in the jurisdiction in which you are located, including locations within the United States. Visa cards may only be used for legal transactions. Display of a payment card logo by an online merchant does not mean that Internet gambling transactions are lawful in all jurisdictions in which the cardholder may be located."

Visa, Providian National Bank, First Union Bank and all other Visa USA members are being asked to send nationwide cardholders this notice, thanks to a recent settlement between Visa and Cynthia Haines, the California women who gambled away more than $70,000 on the Internet and took both Visa and MasterCard to court claiming the debts weren't enforceable. Her reasoning: It's against the law to give and collect loans for gambling in the state of California, so the companies shouldn't have let her gamble with her credit card in the first place.

The fiasco started when Haines was sued by her credit issuer, Providian National Bank, for unpaid bills. Unable to pay up, she filed a countersuit against the bank as well as Visa and MasterCard. She reached a settlement with MasterCard in July that resulted in MasterCard adopting a policy requiring online gambling sites to post a notice telling customers that Net betting could be illegal in their jurisdiction.

CNET.com reported October 14 that Visa has now also reached a settlement. The company has agreed to forgive her debts, a deal similar to the one reached between Haines and MasterCard, according to her attorney, Ira Rothken.

"Visa has acknowledged that Visa is not everywhere you want to be when it comes to Internet gambling transactions," Rothken said. "In some places, like California, such transactions are illegal."

He added, "We believe that Visa has made significant progress, since this case started, in dealing with Internet gambling transactions and ultimately they will be in the position, technologically, to prohibit all such transactions in the United States if and when the Kyl bill is passed by Congress."