Gambling with credit cards has been banned for online betting. This has sparked some outrage across the games community, as punters argue that using credit cards to gamble is a simple way to play and eases the pressure. Plus, it is online at the end of the day. But, that is not to say that this ban has been completely unwarranted, credit cards for betting online does come with its own set of problems that this ban hopes to address in the near future in order to safeguard gamers.
The ban has been put in place due to the set of problems that gambling with credit cards and using credit cards for online betting can have. These problems can be those which are projected or that have already happened. As the UK gambling regulator called a ban on the use of gambling with credit cards most recently, they also issued a statement that said that the reason for this ban is so that it can ‘stop people from gambling with money that they do not have.’
The ban is going to apply to any and every form of online gambling, with the exception of the lottery, and it comes into effect on April 14. But, how has the announcement affected the gambling market already, if at all? Share prices of numerous gambling companies dropped briefly by one percent or so, but these soon quickly came back on the up; this suggests that fans of gambling, who spend their Saturday afternoons on sites like King Casino, do not seem too worried with this news.
Credit card deposits for betting banned: What is the point?
In a statement that was published by the UK Gambling regulators, the use of credit cards for online gambling are “disproportionately used for gambling by individuals who are experiencing harm.” The UK Gambling regulators said that in the UK a total of 800,000 people used credit cards to gamble in 2018, which is the equivalent of 8 percent of all gamblers. The regulator added to this statement saying that 22 percent of credit card gamblers are problem gamblers.
Having said that, the data which has been used to show this is not exactly the most robust. For instance, the last figure comes from a study by Populus of 2,000 representative UK adults. Of these adults in the study, 150 of these had previously used a credit card to gamble online, and 22 percent of the 150 were classed as problem gamblers. So, in other words, a total of 33 problem gamblers using credit cards had informed the decision.
How have operators reacted to the ban?
Across history, bans on gambling have been lifted and re-introduced at various times for various reasons. And so, even though the data is relatively unreliable, the decision that has been made to ban credit cards for online betting was not entirely unexpected by the gambling industry and so the reaction was already kind of in place.
Since the dawn of time, there has always been an ongoing battle from the political and media camps against the gambling industry in the UK or elsewhere, and the regulator themselves had to set an example, or at least look as if it was taking action to do something. With that in mind, the banning move comes as no big surprise to the gambling industry and the operators. As most of the operators knew that this day was coming, they have managed to prepare for it in time.
Will the UK ban have the desired effect?
Indeed, there are a lot of questions that surround the effectiveness of placing a ban on betting with credit cards, and UK operators over the last couple of years have already been forced to identify and cut off problem gamblers who would typically place bets with the use of credit cards.
Irish brokerage Davy has estimated that the ban was a single-digit revenue risk for gamblers in the UK, with the broker saying that the number of people using just credit cards to gamble was much lower than what the UK gambling authorities and regulators have estimated.
Not only that but for players who are determined, there are of course loopholes and ways around the credit card ban. In a lot of cases, players can simply fund an e-wallet such as PayPal with a credit card and then use this wallet to fund their accounts. Various operators have already been told that they need to work with e-wallets to stop this, but similar circumventions happen with prepaid cards and these kinds of things are very difficult to address and rectify.
In theory, the impact is likely to be felt more in the US
More or less the following day since the ban was announced in the UK, a consumer right body in Spain called for similar controls and restricted be put in place there. In fact, almost every gambling market that is regulated is now slowly moving toward greater restrictions being placed on gambling, especially with credit cards, to enable more protection for consumers who are potentially vulnerable. So, it is quite likely that a similar ban could be imposed in the US.
In the US, a ban similar to this one would probably have a much greater impact as well. Between 15 and 20 percent of gambling deposits made online in the US are made via a credit card, which is double the UK number. Not only that, but a report also found that there are roughly 2.9 credit cards per person in the US compared to 0.88 found in the UK. So, while a ban on the use of credit cards in gambling in the US may not exactly be seen on the horizon, in theory, the impact of having one would be greater.
The ban could be a very good thing if it has the desired effect and helps to protect vulnerable people and gamblers from spending money that they do not have. We should encourage changes like this as long as they are always beneficial and help those who need it most.