Betting firms to be banned from allowing gamblers to use credit cards

An industry-wide ban on betting firms allowing consumers to use credit cards to gamble will be enforced on April 14.

The ban, announced by the Gambling Commission on Tuesday morning, will apply to all online and offline gambling products with the exception of non-remote lotteries.

The announcement follows the review of online gambling by the industry's watchdog and the government's review of gaming machines and social responsibility measures.

A total of 10.5 million adults in Britain gamble online – compared to 24 million adult gamblers overall – with 800,000 consumers using a UK-issued credit card to gamble online in 2018 according to financial institution UK Finance.

The ban on online gambling with the use of a credit card will be enforced from April 14

Neil McArthur, chief executive of the Gambling Commission, said: "Credit card gambling can lead to significant financial harm. The ban that we have announced today should minimise the risks of harm to consumers from gambling with money they do not have.

"We 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."

McArthur added: "We realise this change will inconvenience those consumers who use credit cards responsibly but we're satisfied 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 ban is part of our ongoing work to reduce gambling harm. We also need to continue the work we've been doing with gambling operators and the finance industry to ensure consumers only gamble with money they can afford to spend."

Research undertaken by the Gambling Commission revealed 22 per cent of online gamblers using credit cards are classed as problem gamblers.

Helen Whately, culture minister, said: "While millions gamble responsibly, I've also met people whose lives have been turned upside down by gambling addiction.

"There is clear evidence of harm from consumers betting with money they do not have, so it's absolutely right that we act decisively to protect them.

Helen Whately: 'We will not hesitate to take any further action necessary to protect people from gambling harm.'

"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."

The ban will also apply to credit card payments made through e-wallets such as PayPal, and it is understood the major e-wallet providers will be able to implement measures to prevent credit card payments for gambling.

The Gambling Commission's crackdown was welcomed by GambleAware, a charity committed to minimising gambling-related harm.

Marc Etches, CEO of GambleAware, said: "It's essential every effort is made to protect those who may be at risk of experiencing gambling harm, so we welcome the decision by the Gambling Commission to extend the ban on using credit cards for online gambling, as well as offline.

"Gambling is a public health issue and mobile technology gives people access to gambling anytime, anywhere. Anyone who chooses to gamble should be able to do so in a safe environment, where the risks and available support options are made crystal clear.”

The Royal Society for Public Health – an independent health education charity – were in agreement with chief executive Shirley Cramer saying: "This decision marks a clear and welcome step in the right direction toward tackling gambling related harm.

"Credit card gambling is particularly problematic when individuals take part in gambling with money they simply do not have, often with devastating results for individuals, families and whole communities."

The Gambling Commission also announced changes to licence conditions with all online gambling operators required to participate in the Gamstop scheme and offer their customers the service from March 31.

This requirement means consumers will be able to self-exclude from more than 200 online operators through a request to Gamstop – a service used by more than 118,000 people since 2018.

Credit card ban: will be enforced both online and offlineCredit: Edward Whitaker

Fiona Palmer, chief executive of Gamstop, said: "We've been working very hard for the last two years to ensure Gamstop becomes a trusted, secure and independent service that helps anyone who has an issue with their gambling to exclude themselves from the majority of online sites.

"We will continue to work closely with the regulator, operators and charities to ensure we're providing a straightforward, effective self-exclusion scheme for consumers."

Brigid Simmonds OBE, chairman of the Betting and Gaming Council, added: "The Betting and Gaming Council is committed to raising standards, safer gambling and change, and we therefore strongly welcome the requirement for all companies to join Gamstop as part of our continued determination to raise standards in the industry.

"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."

Shares in GVC Holdings, the owner of Coral and Ladbrokes, William Hill and 888 Holdings dipped by between one per cent and three per cent by 9am on Tuesday.

However, analysts at Goodbody believe the ban on credit card use for gamblers will not come as a shock to firms and should have a small effect on revenue in the short term.

Last year GVC Holdings, the parent company of Ladbrokes and Coral among others, said credit cards represented only six per cent of deposit value across their UK brands, adding: "Any potential restriction on their use is expected to have a minimal impact on revenue."

Goodbody analysts said: "Overall the announcement of a ban on credit cards for online gambling in the UK has been well flagged and should not come as a surprise. All operators among our coverage have disclosed that their credit card exposure in the UK is mid-single digits in terms of their deposits.

"While the Gambling Commission has also announced a ban on e-wallet gambling transactions funded by a credit card, we do not expect this will be a significant revenue headwind. We see scope for a proportion of those using credit cards to deposit to migrate to other payment processes such as debit cards.

"The most likely impact is that this will represent a small revenue headwind to operators UK online revenues in 2020. On a positive note, the use of credit cards to gamble online had been a key negative put forward by anti-gambling campaigners so the resolution could be a good move for the industry."

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