UK Gambling Commission reports on gambling with credit cards

Author: Honor Hargaden and Barry Fagan

September 9, 2019

In April 2018, the Responsible Gambling Strategy Board in the UK issued advice that gambling with borrowed money, including through the use of a credit card, is an established risk factor for harmful gambling because it can significantly increase the risk that consumers will gamble with more money than they can afford.

Following this advice, the Gambling Commission in the UK (“the Commission”) published a call for evidence on the issue of gambling online with credit cards.

In July 2019, the Commission reported on the responses it had received. Some of the points noted by the Commission are as follows:

  • The Commission is persuaded that there are risks of harm associated with using credit cards for online gambling. The Commission will consult on the two separate options of either banning or restricting the use of credit cards for all forms of remote gambling (i.e. betting, gaming and lotteries).
  • If action is taken on credit cards alone, then there could be a risk that consumers experiencing harm may use other forms of borrowing to fund their gambling such as overdrafts and loans. It is important that the financial and gambling sectors work to protect customers from harm where they gamble with other forms of borrowed money.
  • The Commission wants to obtain further evidence about consumers’ motivations for using credit cards to gamble, and any specific benefits of using them. The call for evidence highlighted very little in this regard. In aiming to prevent harm from gambling with credit cards, the Commission is mindful of the need to take into account the impact of a ban or restriction on gamblers who are not experiencing gambling harms.
  • The Commission notes that where online gambling deposits are made through e-wallets, the gambling operator has no means of knowing which method the payment originated from (e.g. whether it emanated from a debit card, a credit card or separate balance within the wallet). Unless the current lack of transparency is addressed, a prohibition or restriction on gambling online with credit cards can be easily circumvented. This will likely necessitate prohibiting gambling operators from accepting any e-wallet payments unless e-wallet providers can prevent credit cards being used for online gambling.
  • The Commission notes that it needs to consider whether a prohibition or additional controls should extend to the use of credit cards for non-remote betting.
  • Any future prohibitions or restrictions on the use of credit cards would likely be given effect through changes to Licence Conditions and Codes of Practice (LCCP) which it anticipates would happen in April 2020.

The Government in Ireland is currently taking steps to pave the way for the introduction of a gambling regulator, which is expected to be in late 2020 at the earliest. The steps taken by the Commission in this and other areas will no doubt be of interest to the new regulator and indeed to gambling operators here. A link to the Commission’s report can be found here.

For further information please contact Barry Fagan or Honor Hargaden of the Public and Regulatory team.

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