The gambling industry is bracing itself for key changes to UK legislation in 2020. One of the key regulations to emerge this year is a total ban on the use of credit cards to pay for online and offline gambling. The new law comes after a review by the Gambling Commission into UK betting habits. It discovered that a significant proportion of credit card users were susceptible to becoming problem gamblers.
Alongside other initiatives to create a safe and secure consumer market, the credit card ban complements improvements to personal security requirements and the introduction of the Gamstop scheme, a free-to-use service that prevents customers from accessing gambling sites for a period of time.
However, the credit card ban is set to have the most profound impact. According to UK Finance data from 2018, there were around 800,000 customers who used a credit card to fund their betting accounts. Under the new rules, which will come into play in April, credit cards can only be used on non-remote lotteries, like the National Lottery, and only when purchased with other goods.
Why is there a credit card ban?
The UK’s burgeoning gambling market is, in part, the result of liberal laws that have allowed UK online casinos to flourish but, as reported by MarketWatch, “lacked the foresight to deal with technological advances”. The 2005 Gambling Act made it possible for operators, including sports betting companies, to grow exponentially. While technology has evolved dramatically, legislation has remained largely stagnant. In other words, it is behind the times.
But Britain is modernising its rules. Online gambling equates to annual revenues of £5.3bn – it’s massive business. That’s why it has come under scrutiny, particularly in the way consumers can be protected, both off and online.
The decision to ban the use of credit cards in the UK comes after research revealed that one of the ways to tackle the problem of gambling addiction was to remove the option to spend on credit. According to figures, around one-third of the total number of problem gamblers in 2018 had used credit cards to fund their online accounts. The changes in the law complement other new legislations which seek to create a safer, fairer environment for consumers.
What will the credit card ban mean for customers?
The gambling industry has mushroomed in the UK. It has done so by adapting to innovations in technology, rapidly evolving as hardware and software have improved, and smartly staying on-trend as consumer demand has grown. However, the law governing these operators has not changed and is now trying to catch up.
Indeed, the UK’s liberal approach even saw operators self-regulate last year, albeit driven by growing pressure, and stopped advertising during live sporting events. The decision to ban the use of credit cards will complement initiatives like Gamstop, a service that also features guidance to help gamblers, and tougher regulations around identification.
The credit card ban, which will be effective from 14th April 2020, is seen as a major step forward. Customers will not be able to use it as a payment option from then on, and it will also stop accounts being funded by e-wallets where such money has come from credit. Operators will have to enforce this as part of their license agreement.
It is one of the measures Gamble Aware and Citizens Advice has been pressuring the government to do ever since the Responsible Gambling Strategy Board (RGSB) advised the Gambling Commission to more tightly control the use of “borrowed money”. They argue that more must still be done. For example, by limiting gamblers using payday loan providers or finding loopholes, such as via online payment systems like PayPal.
Speaking recently, the commission’s chief executive, Neil McArthur acknowledged that credit card use could “lead to significant financial harm” and that new measures to stop it from happening would “minimise the risk of harm” and prevent consumers from “gambling with money they do not have”.
A safer, fairer consumer environment
The new credit card regulations represent a major change to the laws around gambling in the UK. Its implementation will affect around one in ten online gamblers, while all operators wanting a UK license will have to abide by the ban. Along with more robust guidelines, the changes reveal a government acknowledging consumer appetite alongside a need to enforce effective measures to create a safe, fair environment for all.