Credit Card Ban Could Be on the Horizon
The UK Gambling Commission has been reviewing the entirety of the gambling sector within the country in order to provide recommendations and suggestions for discussion. As reported recently, the Commission recently made recommendations relating to fixed odds betting terminals and the reduction of their maximum bets. However, one other area that the organisation has focused on is the credit card payment method.
While being quite a staple offering at most online casinos, the regulator may end up placing a ban on gamers using such for depositing money into accounts. Why? Because the Commission feels that they potentially encourage players to wager with money that they do not possess. The recommendation for this ban has been included in a list of topics that need to be brought under discussion. The aim of this group of ideas is to expand the protection of online gaming consumers in any way possible.
Not only this, but the report – given the title of ‘Review of Online Gambling’ – also includes a tightening up of the age verification process, removing any unfair terms relating to bonuses and promotions, and improving the understanding of online customers. The CEO of the Gambling Commission, Neil McArthur stated that the proposals the Commission has announced are for the intention of protecting minors, reducing risks to any vulnerable players and to be able to build upon the regulations that are already in place.
The UK Gambling Industry and the Use of Credit Cards
The report by the Gambling Commission provides figures showing the growth of gambling within the UK. In the years following the introduction and integration of the Gambling Act 2014, the United Kingdom has actually grown to own the biggest regulated gambling sector in the world. The gross gambling yield (GGY) from this brings in £4.7 billion every single year, and growth is not expected to slow down in this industry either.
The Commission believes that more than 50% of online GGY shall end up being generated from mobile devices by 2020. This figure currently sits on 40%. However, problems began to show in the online gambling world when players were provided with the simplicity of making deposits so easily and frequently playing with money that they don’t actually have.
Once a gamer opts to deposit and play with a credit card, it’s quite possible that they will end up amassing large amounts of debt. This is also because credit card providers often treat gambling deposits in the same way as cash advances – with higher interest levels and zero interest-free periods. Sometimes there can be handling fees to pay in these circumstances too. Even though the Commission does not possess any information on player usage of credit cards, the report says that operators have indicated such payments amount to somewhere between 10% and 20% of their overall deposits. This stands out as quite a large amount of money placed with funds that have been borrowed.
While banning credit card deposits would automatically solve this particular problem, it’s one that the regulatory body has to consider a lot. After all, the Commission has said that such a ban could force people into even riskier payment methods with higher costs, like pay-day loans and such. These are actually harder for the Gambling Commission to detect, posing additional problems to consider.