Running a sports betting business gives you boundless opportunities to make a profit in a sector that is becoming more popular and accepted with each passing year. 

Even so, your high-risk payment processor has probably imposed additional fees and restrictions on you that may not make you too happy, including the necessity to open a rolling reserve account. 

Just what is this account, and is there anything you can do to renegotiate it?

Rolling reserve accounts defined

Think of a rolling reserve as an account that has been attached to your merchant account. It holds a pre-specified portion of your credit card sales to cover the cost of any chargebacks or other credit card disputes that customers may bring against you. 

Believe it or not, players have a full 180 days after the purchase date to file the dispute.

By the very nature of the sports betting sector, these situations frequently arise for operations like yours. When added up, they can pose a significant risk to any payment processor for sport betting businesses, which is why they protect themselves by requiring you to set up this sub-account.

How rolling reserves work

Every time you make a credit card sale, excluding via American Express, Discover and debit cards, a percentage of anywhere from five to 10 percent is taken out by the bank and deposited in your rolling reserve account. 

Although you can see the amount of funds that are stored there by logging into your payment dashboard, you cannot access the money. You also don’t earn any interest.

Even so, these funds are yours. You will eventually receive all of them back, but it may take as long as a year to recover what you deposited during your first month of credit card sales. The “rolling” in “rolling reserve” refers to the ongoing process of gradually returning your funds to you over time.

Can you negotiate your rolling reserve terms?

Your payment processor for sport betting businesses has required you to open a rolling reserve account because they perceive your business as riskier than the norm. Although you won’t get far fighting this decision in the beginning of your relationship with them, you may be able to improve the situation over time.

The most impactful step you can take is to do everything you can to keep chargebacks to a minimum. This can be accomplished with fully transparent customer communications and proactive issue resolution. 

Keep in mind, however, that a certain amount of charge disputes are unavoidable no matter how conscientious and proactive you might be.

With this in mind, another step you can take is to grow your business. If you can demonstrate to your merchant services provider that you reliably have the cash on hand to cover the cost of chargebacks from your own account, they may be willing to change the terms of your rolling reserve. 

In the best-case scenario, they might eliminate the requirement altogether.

For most gaming companies, particularly when they are just starting out, rolling reserve accounts are an annoying fact of life. However, adopting best practices for customer service and chargeback avoidance might enable you to minimize their effect on your operations after a significant period of time. 

In the optimal scenario, the requirement might eventually be lifted altogether, so don’t be afraid to ask. Trust us when we say that it won’t happen on its own.