UK Regulator Bans Credit Card Gambling

The UK’s Gambling Commission has announced that it will impose a ban on gambling with credit cards this year. Operators will no longer be allowed to let UK customers use credit cards to fund their wagers. The ban, which is intended to combat problem gambling, is due to come into place on April 14th.

A man working at a laptop holding a credit card.

Research has found that a fifth of people who gamble online with credit cards have a gambling problem. ©Rupixen.com/Unsplash

Consumer Protections at Heart of the Ban

While there has been growing speculation over the last few months that such a ban might come into place, the UK regulator has now confirmed the credit card ban. This idea has been publicly debated for a number of years. This time last year, the credit card ban was hotly debated amongst MPs and campaigners. A year later, the ban on gambling on credit has finally come into place.

The decision is not a light one, as it could cause significant difficulties for Britain’s gambling businesses. The UKGC undertook in-depth research in coming to this decision. The Commission’s Review of Online Gambling examines a number of problem areas facing the gambling industry, and how best to tackle these. In regards to gambling on credit, the review clearly states that it “increases the risk that consumers will gamble more than they can afford”. The UKGC takes the standpoint that consumers should not be allowed to gamble with money that they do not possess.

When coming to this decision, the UKGC was careful to consider the potential negative effects that a ban could have on consumers and the industry. One example raised suggested that consumers might resort to even risker payment methods, such as pay-day loans. According to operators, credit cards are used in up to 20% of deposits.

However, the UKGC has decided that the negatives of gambling on credit outweigh the positives. Gambling Commission Chief Executive, Neil McArthur, explains the significant harms that gambling on debt has on vulnerable people. “We also know that there are examples of consumers who have accumulated tens of thousands of pounds of debt through gambling because of credit card availability. There is also evidence that the fees charged by credit cards can exacerbate the situation because the consumer can try to chase losses to a greater extent.”

Figures show that in the UK, 24 million adults gamble. 10.5 million of these adults gamble online. Gambling Commission research shows that 22% of online gamblers, who use credit cards to gamble with, can be classed as problem gamblers. According to UK Finance, 800,000 consumers in 2018 gambled using a UK issued credit card.

“Gambling with borrowed money, including through the use of a credit card, is a risk factor and therefore consumers’ ability to gamble with credit should be restricted.”

According to the Commission’s review, “The cost of gambling with a credit card is so high that it is hard to envisage why consumers would choose to pay in that way, unless it was to gamble with money not otherwise available to them”. This is because credit card transactions on gambling sites are often treated as cash advances, making them applicable to transaction fees. These can be charged high rates of interest, which accumulates very quickly.

“We realize that this change will inconvenience those consumers who use credit cards responsibly but we are satisfied that reducing the risk of harm to other consumers means that action must be taken. But we will evaluate the ban and watch closely for any unintended circumstances for consumers.”

The UKGC is also aware that this ban will not prevent consumers from betting with borrowed money outright. For example, it will still be possible to use credit cards to fund e-wallets, which can still be used on gambling sites. The ban will however make it more difficult for customers to bet on credit and will discourage many from attempting to do so.

“We will implement a ban on credit cards which adds to measures such as age-verification, markers of harm and affordability checks, additional funding for research, education and treatment and new codes of conduct to protect the consumer.”Brigid Simmonds OBE, Chairman, Betting and Gaming Council

The new credit card ban will apply to both online and offline gambling. It is hoped to act as another means of protection for people who are vulnerable to the harms of gambling. Non-remote lotteries are the only gambling products that will be exempt from the credit card ban. These lotteries are run for good causes and will have to add their own extra protections. When buying lottery tickets at shops, customers will only be able to use credit cards if they are purchasing other products too.

Culture Minister Helen Whately has voiced her support for the ban on gambling with credit cards. “There is clear evidence of harm from consumers betting with money they do not have, so it is absolutely right that we act decisively to protect them”. Whately went on to speak about the benefits of other measures that have recently been brought in, such as stake caps on fixed odds betting terminals and increased specialist support through the NHS.

“But there is more to do. We will be carrying out a review of the Gambling Act to ensure it is fit for the digital age and we will be launching a new nationwide addiction strategy in 2020. We will not hesitate to take any further action necessary to protect people from gambling harm.”

Gamstop Scheme Now Mandatory

The credit card ban is not the only new regulation that the UKGC is bringing in. From March 31st, all online gambling regulators will have to sign up to the Gamstop self-exclusion scheme. Brigid Simmonds OBE, of the Betting and Gaming Council praised this news. “The BGC is committed to raising standards, safer gambling and change, we therefore strongly welcome the requirement for all companies to join Gamstop as part of our continued determination to raise standards in the industry”.

Gamstop is a scheme that has been designed to allow gamblers to exclude themselves from online operators. By being able to do so through just one request, as opposed to through each operator individually, it will be much easier for gamblers to take control of their gambling habits. There are more than 200 online operators, so without universal schemes like Gamstop, it is almost an impossible task for problem gamblers to cut themselves off from these sites completely.

” We welcome the fact that GAMSTOP has got to this stage in their development and encourage them to continue to improve their offer, particularly in relation to preventing those who have self-excluded being targeted by direct marketing. It is important that self-exclusion schemes are as effective as possible and they will be most effective when used in combination with other blocking tools such as gambling blocking software and payment card blocking.”Neil McArthur, Chief Executive, Gambling Commission

Culture Minister Helen Whately has backed the UKGC’s decision, stressing that the gambling industry “must be socially responsible and use the power of technology and data to help consumers manage their spending and protect them from harm”.

“By making it a regulatory requirement for all online gambling websites licensed in Great Britain to sign up to Gamstop I am confident that people who have taken the significant step to opt out of gambling will be well supported, alongside a wide range of other tools.”

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