Are the Gambling Commission Going to Ban Credit Cards?

For years now, gamblers have used credit and debit cards to fund their activities online. Even in an age where various e-wallet platforms and cryptocurrencies, punters have continued to use plastic to credit their accounts.

This could be about to change, however, with the UK Gambling Commission considering outlawing the use of credit cards in online betting.

In this article, we'll explore this idea in further detail, while asking whether it will help to drive more responsible gambling in the digital age.

Why is the Ban Being Considered?

At the heart of the Commission's considerations is a desire to protect potentially vulnerable gamblers, with credit cards enabling individuals to wager more money than they necessarily have. This is why debit cards have not been treated in the same way, as they relate directly to bank accounts with actual cash holdings.

The UK regulator was alerted to the potential issue posed by credit card usage following a recent industry report, in which betting operators confirmed that this payment method was used to fund between 10% and 20% of all online deposits. The study was commissioned by the Department for Digital, Culture, Media and Sport (DCMS), which recently proposed a £2 betting limit for fixed-odds betting terminals (FOBTs) and remains on focused on creating a safer environment for gamblers both on and offline.

These findings, when aligned with the fact that the online gambling industry generated profits of £4.7 billion in the year ending October 2017, suggested that the market's exponential growth was partially being driven by credit and compelled the regulator to take action.

Will this Move Help to Protect Gamblers?

As you would expect, this radical proposal has polarised opinions within the industry, as while some celebrated the move others have questioned its potential effectiveness. On a positive note, the banning of credit cards would stop people gambling with what is essentially a cash advance, and one that carries a transaction fee and a relatively high rate of interest.

Critics have argued that this ban would simply compel gamblers to seek out equally questionable sources of funding, including payday loans and bank overdrafts. These are also unsecured cash advances that can be easily accrued in the digital age, meaning that players who gamble (and lose) more than they can afford will ultimately become trapped in a spiralling cycle of debt.

The potential use of payday loans to fund gambling habits would be particularly concerning, particularly given the inflated rate of interest. While this type of short-term loan has seen its rates capped at 0.8% per day as part of a recent government clampdown, customers are still required to pay back more than they borrowed and this could cause huge financial and social issues in instances where the money is used to fund gambling activities.

The issue here is that there is no viable way of stopping people from using borrowed money to fund their activities, as gamblers could simply transfer the accrued funds into their account using a debit card. These funds could even be transferred from a bank account to an e-wallet payment platform such as PayPal, making it impossible to trace back to an original source.

With this in mind, banning the use of credit cards represents a realistic step in the quest to protect vulnerable gamblers in the digital age. So long as this is part of a larger initiative, and one that ultimately uses data to limit each individual's online gambling activity, it's a viable measure that one that should be welcomed within the industry.
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