Credit Card payments banned for UK-based gambling

If you are a responsible gambler in the UK, then things are going to become a little more complicated for you when it comes to depositing cash into your online betting or gambling account. That is because as of today, new UK Gambling Commission legislation that was first announced back in January 2020, will mean that you are no longer able to fund your sports betting or gambling account using a credit card.

The ban begins with immediate effect on the 14^th April 2020 and means that all gambling providers that operate within the UK, which ranges from bingo sites, to sports betting sites and online casino providers, now have to ensure that all their current customers, and any new sign ups, now adhere to these strict new guidelines.

The ban includes payments into an account from a credit card direct and also payment from eWallet services like PayPal that allow credit cards to be registered to an account and used to make payments via the third-party provider.

For the past few months, sites in the UK have been sending out emails to customers in order to prepare them for the changes but it is going to be interesting to see whether the transition is smooth, or produces chaos in an industry that has already been hit hard by other well documented recent events.

Gambling Commission rationale

Speaking about the ban on credit card payments for gambling, the Gambling Commission's Chief Executive Neil McArthur stated:

"This credit card ban will further protect consumers from financial harm and from today, nobody in Great Britain can use a credit card to gamble."

"It is a ban which ultimately reduces the risks of harm to consumers from gambling with money they do not have."

"The ban also comes at a vital time as we are seeing an increase in the use of some online products, such as online slots and virtual sports, and our online search analysis shows an increase in UK consumer interest in gambling products since the lock down began."

"This is another milestone and we will continue looking for ways to make gambling safer."

The ban applies not only to all online gambling products, but all offline products too, such as in betting shops.. However, there are a couple of exceptions to the rule, somewhat controversially, that includes non-remote lottery games, such as the National Lottery.

The ban became law after the Gambling Commission's recent review of online gambling and also the governmental review of Gambling Machines and Social Responsibility Measures, which had its public consultation phase from August through to November 2019. The results of which shaped the recent legislation.

Anti-gambling industry sentiment

The decision to impose the ban was hardly a surprise. The British Government has been one of a number of outlets that have been openly critical of aspects of the gambling industry in recent times, notably with betting shops used of fixed odds terminal betting (which had severe limits imposed on them in previous legislation).

Dealing with problem gambling has therefore become something of a political hot potato and there is concern that the recent measures are more designed to show that the government is attempting to tackle the issue of problem gambling in a draconian way, rather than being a strategic approach that is worked out by government and parties with a vested interest in the industry.

The Gambling Commission even admitted that before the consultation surrounding legislation took place, that they were fully committed to imposing a ban on credit card gambling. Therefore, it can be assumed that regardless of the outcome of the consultation last year, a ban was going to be imposed. That is hardly the process an impartial body would follow.

To understand whether credit cards contribute to the issue of problem gambling in the UK, we need to first understand the scale of the problem in the UK at present to put the ban into wider context.

How big an issue is problem gambling in the UK?

A recent article on the iGamingBusiness website revealed the following statistics:

• 24 million adults in the UK have or do gamble at times.
• 10.5 million gamble online.
• Of the 10.5 million online gamblers, 800,000 of those use credit cards to gamble online.

A quick review of the figures shows therefore that out of the 24 million adults that gamble in the UK, just 3.3% of them use a credit card to bet. If you narrow those figures down to online bettors, then that percentage increases to just 7.6% of online bettors using a credit card for gambling.

At this point, it is worth noting that these are not problem gamblers. These are just people who elect to use credit cards to gamble. The latest industry figures from research undertaken by the Gambling Commission for the study (from a sample size of just 2,000 people) revealed that.

• 22% of credit card gamblers were problem gamblers.
• 25% of were experiencing what was termed "modest levels of harm."
• 20% experienced what is deemed "lower levels of harm".

However, what was telling is that the definitions of these modest and lower levels of harm are were not identified. Is losing any bet a lower level harm financially? After all you have lost money? In that case, are all gamblers experiencing lower level harm when they lose a bet?

If we assume these figures are correct (and that is dangerous to do of a sample size of 2,000 from a community of over 24 million), then 22% of credit card gamblers being problem gamblers equates to 176,000 problem gamblers in the UK. Out of a population of 24 million gamblers, that equates to around 0.73% of the gambling population of the country.

When viewed as a percentage of the total population, the new gambling measures are going to impact just 0.26% of the UK population.

Of course, that is not to diminish the impact of irresponsible gambling. It is most certainly a scourge in the industry, but it is one that the gambling industry was already taking plenty of steps to effectively manage and support those that are most affected by it.

The question is whether such a draconian ban was the correct strategic point for the industry and problem gamblers, or whether it was introduced more with a view to political point scoring with those that have openly criticised the gambling industry in recent times. The jury, on that very point, very much remains out.

Will the ban work?

Of course, for any new piece of legislation to work, it has to be effective. So what is the likelihood of the new gambling legislation banning credit cards for online gambling being a success in the UK?

The Gambling Commission argue that by banning credit cards, they lower the potential risk of players borrowing more on credit than they can afford to repay and of course, the interest that they would need to pay to service that debt would also be removed. They argue by doing this, that financial loss for problem gamblers using credit cards could be "slowed down and harm is potentially curtailed."

But will it? 42% of those lower risk credit card gamblers said that they would simply switch to using debit cards instead. A similar number, 41%, said they would stop gambling completely, although as anyone who has experienced an addiction knows, what people say and what they actually do when they have a problem with something is a very different matter.

More positive for the Gambling Commission is the amount of awareness that the ban has produced in regards to credit card gambling, with 82% of credit card gamblers stating that they were not aware of the fees they incur when using this form of payment and 75% stating that they would have been deterred from using credit cards in future, if they were to remain available.

On the face of it, problem gamblers that use credit cards will find that this avenue is now closed off to them from today. However, that now means that any debt that they have previously run up on credit cards, will remain and they will be paying interest on that debt. So while the new laws mean new debt cannot be run up, it does not resolve the issue with any current debt a problem gambler may have.

Furthermore, as anyone who has worked with someone with a problematic addiction will know, stopping access to one line of funding is not a cure-all. Problem gamblers can and will find alternative sources to fund their problem gambling. That could then have a secondary impact on their families and loved ones.

What is our verdict of this thorny issue?

While we are for any measures that actively help stop and mitigate the effects of problem gambling, we think that this move is simply another measure applied to the gambling industry, which itself is trying hard to help those gamblers that may need extra support and assistance to avoid becoming or remaining a problem gambler.

Banning credit cards is in effect, using a sledgehammer to crack a walnut.

The rationale for introducing the ban is also flawed. Sure it may make credit card gambling impossible in Great Britain, but it does nothing to address any issues that already exist for these problem gamblers, it inconveniences the many more gamblers that were using credit cards sensibly for their gambling and means that betting sites, banks and other financial institutions now have to set up systems to ensure that credit cards are not used for payments for gambling. That is expensive to set up and maintain and, ultimately, there will be loopholes that people can exploit.

It is also somewhat disingenuous to allow people to use credit cards for the UK government sanctioned National Lottery ticket payments, while not allowing them for other forms of gambling. I can see a lot of problem gamblers instead of not using credit cards, simply using their card to purchase lottery tickets instead.

If this legislation was designed to genuinely help problem gamblers with the issues they face, we would support it wholeheartedly. Unfortunately, it smacks of opportunism from the government to try and curry favour with a number of lobbyists who want to see the gambling industry more strictly regulated. It is also somewhat of a "nanny state' move to assume that people cannot effectively decide when and where to use credit card payments for items.

It will be interesting to see the effect that the ban has, or doesn't have, on problem gambling. It remains to be seen whether it will be an effective measure at all for the consumer or whether it was simply a way to score some cheap political points.

What options are available for me now I can't use credit card payments?

If you used credit card for payments up until the 14th April, then there are other options available to you that go beyond bank transfers or using your debit card to fund your gambling.

One option is to use eWallet services such as Neteller or Skrill. With these services you can register a debit card or your bank details to that account, rather than a credit card. You can then transfer funds to your bank account, via PayPal, to your choice of online betting/casino provider.

This is a better option especially for punters that don't like to directly input their bank details or debit card information into their betting account. PayPal and Skrill services offer another layer of security for you this way.