Gaming online is something that a lot of us can enjoy from time to time in order to unwind, relax and have fun. Not only that, but it is a really easy and accessible way to unwind. There is no commute involved, you will not get any unexpected costs like a last minute kebab or a taxi, and you are the one who is in control of what you do and how long you do it for. But, that is not to say that online gaming does not come with its own set of problems. You can check out www.paybymobilecasino.com/pages/pay-by-mobile-slots for more details.
Because of the set of problems that online gaming comes with, those problems which are projected or indeed happening, the UK gambling regulator has called a ban on the use of gambling with credit cards this week, stating that the motive behind this ban is aimed to stop people from ‘gambling with money that they do not have.’
The ban comes into effect on April 14, and it will apply to any and every form of gambling online with the exception of the lottery. Did this affect the gambling market? Not particularly as the share prices of various gambling companies dipped briefly by a per cent or two before coming back on the up.
Why are credit card deposits for betting being banned?
In a statement published by the UK Gambling regulators, the use of credit cards with online gambling are “disproportionately used for gambling by individuals who are experiencing harm.” The UK Gambling regulators said that a total of 800,000 people used credit cards to gamble in the UK in 2018, which is the equivalent of 8 per cent of all gamblers. The regulator added to this statement any saying that 22 per cent of credit card gamblers are problem gamblers.
Having said that, the data which is used to show this is not exactly the most robust. For instance, the last figure comes from a study by Populus of 2,000 representative UK adults. Of these adults in the study, 150 of these had previously used a credit card to gamble online with, and 22 per cent of the 150 were classed as problem gamblers.
So, what that means in other words is that a total of 33 problem gamblers using credit cards had informed the decision.
Did operators expect credit card deposit bans for betting to happen?
Over the years, bans on gambling have been lifted and re-introduced across various times in history for various reasons. And so, even though the data is relatively unreliable, the decision that has been made was not entirely unexpected by the gambling industry.
Since the dawn of time, there has always been an ongoing battle from the political and media camps against the gambling industry in the UK and the regulator themselves had to set an example, or at least look as if it was taking action to do something. With that in mind, in comes as no overt surprise to the gambling industry and the operators. As most of the operators knew that this day was coming, they have managed to prepare for it. But, will the UK ban have the desired effect that it is aiming for?
Indeed, there are a lot of questions which surround the effectiveness of placing a ban on credit cards, and UK operators over the last couple of years have already been forced to identify and cut off problem gamblers who would typically place bets with the use of credit cards. Davy, Irish brokerage, has estimated that the ban was a single digit revenue risk for gamblers in the UK, with the broker saying that the number of people using just credit cards to gamble was much lower than what the UK gambling authorities and regulators have estimated.
Not only that, but for players who are determined, there are of course loop holes and ways around the credit card ban. In a lot of cases, players can simply fund an e-wallet such as PayPal with a credit card and then use this wallet to fund their accounts. Various operators have already been told that they need to work with e-wallets to stop this, but similar circumventions happen with prepaid cards and these kinds of things are very difficult to address and rectify.
The impact in theory is likely to be greater in the US
Pretty much the day after the ban was announced in the UK, a Spanish consumer rights body called for there to be similar controls put into place in Spain. That being said, in fact, almost every gambling market that is regulated is now slowly moving toward greater restrictions being placed on gambling to enable more protection for consumers who are potentially vulnerable. So, it is quite likely that a similar ban could be imposed in the US.
In the US, a ban similar to this one would probably have a much greater impact as well. The reason why? Between 15 and 20 per cent of gambling deposits made online in the US are made via a credit card, which is double the UK number. Not only that, but a world class payments report has also found that there are roughly 2.9 credit cards per person in the US compared to 0.88 found in the UK. So, while a ban on the use of credit cards in gambling in the US may not exactly be seen on the horizon, in theory the impact would be a great one.
All things aside, it could be a very good thing that gambling with the use of credit cards online is banned if it has the desired effect and helps to protect vulnerable people and gamblers from spending too much money in a remote setting, money that they do not have in particular. It makes sense that we encourage changes like this as long as they are always beneficial to the consumer and aids in helping those who need it the most.