Is the end in sight for gambling online with credit cards?

The Gambling Commission has today announced that, commencing in mid-August 2019, it will be holding a twelve-week consultation on the issue of gambling online with credit cards. This follows the Commission’s earlier call for evidence on this subject in February this year.

The Commission outlines the options as follows:

One approach would be to ban gambling online with credit cards. However, the public and all other stakeholders will be consulted on other options, including restricting the use of credit cards. The Commission will then take the most appropriate course of action in view of any evidence obtained by this consultation, alongside data already submitted.

It goes on to state that its call for evidence provided several key interest points around the use of credit cards to gamble online. It says that these included:

  • Alternative forms of borrowing: if action is taken on credit cards alone then consumers experiencing harm may use other forms of borrowing to fund their gambling, such as overdrafts and loans. It is therefore vital that the financial and gambling sectors work to protect customers from harm where they gamble with other forms of borrowed money.
  • E-Wallets: where online gambling deposits are made through some e-wallets, operators have no means of knowing which method the payment originated from. Any future proposals would therefore require e-wallet providers to take the necessary action to support any regulatory measures introduced.
  • Further evidence: the Commission wants to obtain further evidence about consumers’ motivations for using credit cards to gamble, and any specific benefits of using them. The call for evidence highlighted very little in this regard. In aiming to prevent harm from gambling with credit cards, the Commission is clear that it must take account of the impact of a ban or restrictions on gamblers who are not experiencing gambling harms.

In a clear indication that change is on the cards, Paul Hope, Executive Director at the Gambling Commission, is quoted as saying:

Gambling with borrowed money is known to be a risk factor for consumers, so we think there is a need for action. This consultation will help us decide what that action should be.

In our view, unless a good convincing argument otherwise is advanced in response to the forthcoming consultation, a credit card ban is likely to be imposed for gambling online because:

  • such a ban would be a logical extension of the Commission’s present stance as guardian not only of the vulnerable but also all those who might possibly become vulnerable in the future;
  • in 2018 the Responsible Gambling Strategy Board recommended restricting consumers’ ability to gamble online with credit, including prohibiting gambling online with credit cards on the ground that gambling with borrowed money significantly increases the risk that consumers will gamble with more money than they can afford;
  • in its subsequent Review of Online Gambling, the Commission outlined its support for the principle that consumers should not gamble with money they do not have. You can download below a full summary of all that was stated in that review on the issue of gambling on credit;
  • it is likely to be considered anomalous that a distinction should remain between use of credit cards for (a) gambling online and (b) gambling within land-based premises. In this respect, non-remote casino and bingo operators cannot accept credit cards for payments to participate in gambling on their premises and acceptance of credit card payments by non-remote betting operators is restricted (in the sense that they can only accept payment by credit card where that payment is made to a customer account).