All eyes will be on the UK market following credit card ban

The “Gambling Payments & Self-Governance” panel session moderated by David Clifton for CasinoBeats Malta Digital today (1 July 2020) is featured in a PaymentExpert article published immediately following the session entitled “All eyes will be on the UK market following credit card ban” (that you can download below).

David’s panel, Paloma González Mascaraque (Head of Payments, VBet), Ievgeniia Derbal (Head of Legal, Parimatch) and Paul Buck (CEO, Epic Risk Management) – pictured above – addressed a range of topics during their session, including the following:

  1. The Gambling Commission’s decision to ban credit card gambling in the UK was intended to “add levels of friction to the process of gambling with borrowed money so that the rate of financial loss is slowed down”.
    • Does the ban – brought into force on 14 April 2020 – represent a step in the right direction in terms of responsible gambling or are there too many loopholes? Pre-paid cards, pay-day loans, cash withdrawals using credit cards: what other loopholes are there?
    • Some operators offer as a payment option the ability of consumers to charge gambling payments to their phone contract, allowing the customer to subsequently pay their phone bill by means of a credit card. There has been no spike in payments by mobile phone since the credit card ban was introduced and the Gambling Commission has confirmed that is not presently considering any regulatory intervention in this respect.
    • The Commission’s research, conducted in advance of its decision to impose the ban, showed that credit cards were disproportionately used for gambling by individuals who are experiencing harm from their gambling – 22% of credit card gamblers being PGs, 25% experiencing moderate levels of harm and 20% lower levels of harm. Is that likely to differ in other countries where cultural values related to acceptability of debt have bearing on levels of credit card use – for example there is very considerable use of credit cards in the USA and Canada, much lesser usage in France, Germany and Greece?
  1. The credit card ban extends beyond direct credit card payments to operators. As was confirmed by David in another PaymentExpert article in January 2020, UK licensed remote gambling operators now have a responsibility to only accept payments via e-wallets where the wallet provider can give an assurance that that the e-wallet has not been funded by a credit card.
    • Most e-wallet providers have been able to give operators that assurance (although not Revolut – hence the UKGC warning issued on 10 June), but what about extending the ban to other forms of credit?
    • In the UK, politicians in the Gambling Related Harm All Party Parliamentary Group have recently said: “Gambling with other forms of credit such as loans and overdrafts should also be prohibited in line with the sentiment behind the credit card ban that people should not be gambling on credit of any kind”. Would that be a step too far and how could it be enforced?
  1. Is the UK credit card ban a slippery slope?
    • Will other jurisdictions be following suit?
    • What sort of difference would it make if a credit card ban was introduced in countries where lower levels of credit card usage exist?
    • What alternative restrictions on payment methods (if any) are being considered in those countries?
  1. A commonly expressed fear exists that the greater the restrictions that are imposed on gambling operators, the less attractive their products may appear to their customers, so that the very aims of increased consumer protections will be frustrated by increasingly large numbers of online gamblers (including a large proportion of problem and at-risk gamblers) removing their custom to illegal unregulated black market operators, most of which will provide no consumer protection at all.
    • Will the unregulated market benefit from vulnerable players credit betting on their platforms?
    • In this respect, research has shown that the greater the restrictions imposed on operators licensed in Sweden, the more significant is their exposure to competition from unlicensed operators. How can the regulated sector counter this threat?
  1. Should the finance sector be doing more to eradicate this possibility? As confirmed in the ABSG’s recent “Progress Report on the National Strategy to Reduce Gambling Harms”, UK banks (including HSBC, Starling, Monzo, Halifax & Barclays) offer customers the option of blocking gambling transactions and NatWest has formed a partnership with GamCare to offer counselling services within its premises.
    • However, should all in the finance sector be doing more, for example conducting customer affordability checks themselves rather than leaving it to gambling operators to do so, as the breadth of data they hold gives them a much broader perspective on their customer’s finances than gambling operators possess?
    • Work is being undertaken in the UK by the Money & Mental Health Policy Institute – funded by money received from a regulatory settlement between a gambling operator and the UKGC – that is intended to engage financial services in tackling gambling-related harm. What degree of willingness exists on the part of the financial services sector to engage in such an initiative both in the UK and elsewhere in the world?

Those who have registered for CasinoBeats Malta Digital can view the whole of the “Gambling Payments & Self Governance” panel session here.

UPDATE: The above session is featured in an SBC News report on Day 2 of CasinoBeats Malta Digital that you can find on YouTube here.