UK begins consultation on credit card use

In the UK, the gambling regulator has widened its investigation into whether or not gambling users should be able to use their credit card. The consideration comes following months of discussions over what further action should be taken to prevent problem gamblers from being pushed into debt.  

The announcement, which was made on Wednesday, confirmed that a 12-week consultation will be opened next month and will consider the impact that potential credit use might have.

The director of the UK Gambling Commission, Paul Hope, stated that “gambling with borrowed money is known to be a risk factor for consumers, so we think there is a need for action.”

In February, the UKGC called for evidence to be provided from banks, with it hoping that data would provide insight into why gamblers often chose to use credit cards for their gambling usage. However, the Commission was left without answers, as the data failed to provide any insight on why customers often use credit cards or why there might be perks from doing so.  

In the announcement, the Commission confirmed that it was considering an outright ban on the use of credits for gambling activity but that it would consider all evidence submitted. It was seeking information from the public and industry stakeholders.

Yet, whilst the UKGC will consider this matter, the regulator issued a word of caution to the, stating that the UKGC “must take account of the impact of a ban or restrictions on gamblers who are not experiencing gambling harms.” 

According to recent statistics, up to 800,000 customers used credit cards to gamble in 2018, a figure that amounts to 20% of all deposits made. 

The UKGC also admitted the limitations of this proposal, stating that a ban on credit cards would not eliminate the risk of customers using other forms of gambling such as loans or overdrafts. In addition, it would not be able to ban the use of credit cards to purchase E-wallet funds.  

As a result, the UKGC suggested that any such ban would require huge cooperation from various sectors of the online payment network.  

Many British politicians, particularly those in the Labour Party, have made it clear that they wish to see an outright ban on the use of credit cards for gambling.  

However, industry insiders have advised that such a ban could create significant harm for the industry.