We are likely going to block debit card transaction which originate for gambling. These are identified by the codes in the transactions themselves. Recent litigation has us hesitant enough that this isn't worth the risks.

Under 230.4(b)(5) should any notification be provided to the customers advising them of this in advance?

I believe yes, but I'd like an out. And since these transactions could be legal, it can't be ruled out just because some could originate "illegally".

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Andy Zavoina
Opinions stated are not necessarily that of my employer.

We have included a prohibition statement in our EFT disclosure. All customers were notified of change via periodic statement message.

Andy:
i.e., VISA. Our bank called and VISA will block the transactions with a letter from your institution on the illegal transcodes. May be worth the call as it is your out and helps if the merchant forces the transactions to your customer's account as the bank does not loss the funds. Just a suggestion.