The Gambling Commission has announced a ban on gambling businesses allowing consumers in Great Britain to use credit cards to gamble.
The ban, which comes into effect on April 14, follows the Commission’s review of online gambling and the Government’s Review of Gaming Machines and Social Responsibility Measures. A public consultation was carried out between August and November 2019.
24 million adults in Great Britain gamble, with 10.5m of those gambling online. UK Finance estimate that 800,000* consumers use credit cards to gamble.
Separate research undertaken by the Commission shows that 22 per cent of online gamblers using credit cards to gamble are classed as problem gamblers – with even more at some risk of harm.
The ban, which will apply to all online and offline gambling products with the exception of non-remote lotteries, will provide a significant layer of additional protection to vulnerable people.
Neil McArthur, Gambling Commission chief executive, 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.
Research shows that 22 per cent of online gamblers using credit cards are problem gamblers, with even more suffering some form of gambling harm. We also 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.”
Mr McArthur said although he understood that some consumers used credit cards because they were convenient, the risk of harm to others was too high to allow the use of credit cards to continue.
“We realise that this change will inconvenience those consumers who use credit cards responsibly but we are satisfied that reducing the risk of harm to other consumers means that action must be taken.” he said. “But we will evaluate the ban and watch closely for any unintended circumstances for consumers.”
Mr McArthur warned that although likely to reduce gambling harm, the banning of credit cards needed to be accompanied by other efforts.
“The ban is part of our ongoing work to reduce gambling harm. We also need to continue the work we have been doing with gambling operators and the finance industry to ensure consumers only gamble with money they can afford to spend.”
Last year Department for Digital, Culture, Media and Sport (DCMS) ministers also met with banks and gambling operators to discuss their growing concerns, and how companies could use technology and customer data to help those at risk of developing gambling problems, including those using credit cards.
Culture Minister Helen Whately said: “Whilst millions gamble responsibly, I have 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 is absolutely right that we act decisively to protect them.
“In the past year we have introduced a wave of tougher measures, including cutting the maximum stake on fixed odds betting terminals, bringing in tighter age and identity checks for online gambling and expanding national specialist support through the NHS Long Term Plan. We have also secured a series of commitments from five leading gambling operators that will include £100 million funding towards treatment for problem gamblers.
“But there is more to do. 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.”
Today has also seen the Commission announce changes to licence conditions which will require all online gambling operators to participate in the GAMSTOP scheme and offer their customers the service from 31 March.
Mr. McArthur added: “We welcome the fact that GAMSTOP have got to this stage in their development and encourage them to continue to improve their offer, particularly in relation to preventing those who have self-excluded being targeted by direct marketing. It is important that self-exclusion schemes are as effective as possible and they will be most effective when used in combination with other blocking tools such as gambling blocking software and payment card blocking.
Helen Whately added: “We have been clear to all businesses that have connections to gambling, such as operators, social media platforms and banks, that they must be socially responsible and use the power of technology and data to help consumers manage their spending and protect them from harm. I have been encouraged by the majority of major high street banks introducing measures to allow customers to switch off spending on gambling through mobile apps.
“By making it a regulatory requirement for all online gambling websites licenced in Great Britain to sign up to Gamstop. I am confident that people who have taken the significant step to opt out of gambling will be well supported, alongside a wide range of other tools.”
Commenting on the announcement by the Gambling Commission about credit cards, Brigid Simmonds OBE, Chairman of the Betting and Gaming Council, said: “The Betting and Gaming Council is a body firmly committed to raising standards, safer gambling and change.
“We will implement a ban on credit cards and indeed our members will go further to study and improve the early identification of those at risk. The use of credit cards were previously used as a potential marker of harm which might lead to further intervention with customers.
“We welcome the requirement for all companies to join GamStop as part of our continued and ongoing determination to raise standards in the industry. Measures already introduced include new age-verification and affordability checks, additional funding for research, education and treatment and new codes of conduct.”
Fiona Palmer, Chief Executive of GAMSTOP said: “We are delighted that the Gambling Commission has today announced that integration with GAMSTOP will become a licence condition for online operators by March 31st.
We have been working very hard for the last two years to ensure that 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. More than 118,000 people have already used GAMSTOP to exclude themselves from online gambling for either six months, a year or five years, and today’s announcement recognises the progress that we have made.
We will continue to work closely with the regulator, operators and charities to ensure that we are providing a straightforward, effective self-exclusion scheme for consumers. We understand that, for anyone experiencing issues with their gambling, self-exclusion may not offer a complete solution and is only one tool amongst a range of measures that might need to be deployed. We take care when anyone contacts us via our helpline or through the further support section of our website to refer anyone requiring specialist help to independent providers with the appropriate expertise.
We are confident that the launch of GAMSTOP as a one-stop self-exclusion scheme for all licensed operators will allow us to grow the service significantly and to provide greater protection to consumers”.