Chargeback — iGaming GlossaryA chargeback is a card-issuer-initiated reversal of an iGaming deposit, usually disputed as fraud or "unauthorised gambling" by the cardholder.

Chargeback

**TL;DR:** A chargeback is a card-issuer-initiated reversal of an iGaming deposit, usually disputed as fraud or "unauthorised gambling" by the cardholder.

What it means

When a player disputes a deposit with their bank, the bank reverses the funds and bills the operator a chargeback fee ($15–$50) on top of losing the deposit. Reason codes vary: "card not authorised", "fraud", "service not received". A meaningful share are "friendly fraud" — the cardholder gambled, lost, and is disputing to recover losses.

Card networks (Visa, Mastercard) maintain chargeback ratio thresholds: typically 0.9% or 1.0% of monthly transactions. Cross the threshold and the operator enters a monitoring program (Visa VAMP/VDMP, Mastercard ECP) with fines and ultimately MID termination — catastrophic for a gambling business.

Formula / How it's measured

Chargeback rate = Chargebacks / Total transactions in the same period. Some PSPs measure on $ value vs count; the threshold definitions vary.

Example: a sportsbook processes 480,000 card transactions in April with 3,200 chargebacks → 0.67% rate. Visa threshold 0.9% → safe but watched. Of those 3,200, 1,400 successfully represented and recovered, 1,800 lost. Direct cost: 1,800 × ($72 average + $25 fee) ≈ $174,600.

Why it matters for operators

Chargebacks are simultaneously a cost item, a fraud signal, and an existential MID risk. Operators with poor chargeback hygiene lose card processing entirely, which is near-impossible to replace in markets where cards are the dominant deposit method.

Common benchmarks (2026)

Healthy iGaming chargeback rate: 0.3%–0.7%
Visa/MC card-network threshold: 0.9%–1.0%
Average chargeback amount in iGaming: $50–$200
Representment success rate: 25%–50%
Fees per chargeback: $15–$50
Use of Ethoca / Verifi pre-dispute resolution: now standard at Tier-1