The United Kingdom Gambling Commission (UKGC) announced on Wednesday it would be holding a consultation with the public and industry stakeholders on the use of credit cards for online gambling. The regulator is considering an outright ban on credit card gambling but said it would be taking input from the gambling industry under advisement before taking further action.
In a statement, Paul Hope, Executive Director at the UKGC, explained that the consultation process, which starts in mid-August, would help the Commission decide on the measures needed to eliminate the risks for consumers posed by gambling with borrowed money. The confirmation follows on a call for evidence issued by UKGC in February with the purpose of seeking information from gambling businesses and members of the public on the same topic.
Following a recent call for evidence on the issue of gambling online with credit cards, the Gambling Commission has confirmed it will be holding a twelve-week consultation to begin in mid-August. #fairerandsafer https://t.co/Z7VPJ5IKlH pic.twitter.com/3CnxD8JVd0
— Gambling Commission (@GamRegGB) July 24, 2019
Now, the consultation process will last 12 weeks, the statement says, and it will focus on several key points, including an overview of the financial and gambling sectors, and the possibility of replacing credit cards with alternative forms of borrowing for gambling purposes. The regulator explained that if a ban on credit card gambling is to be introduced, consumers may look for other methods for borrowing money to fund their gambling habits such as loans and overdraft. It is essential, then, to guarantee that financial institutions have taken proper action to protect consumers from harm.
The UKGC outlined two additional key points that would be discussed in the following three months. One of them is e-wallets and, according to the gambling industry watchdog, these payment methods also pose a certain risk for gamblers. When e-wallets are used for gambling, operators are unable to pinpoint the origin of the payments and, more importantly, whether the funds were transferred from credit cards or not. Additionally, the Commission would be seeking more evidence about gamblers’ motivations for using credit cards.
Recent Call for Evidence Fails to Gather Sufficient Data
In February, the UKGC issued a call for evidence on gambling online with credit cards. It noted that such practices were already well-established as a risk factor for harmful gambling and sought “meaningful input” to help decide what restrictions were needed. In its statement from Wednesday, however, the Commission admitted that the procedure had failed to reveal any meaningful insights.
Now, it would be looking at the consumers’ motivations for using credit cards for gambling online and whether this method of payment is beneficial for gamblers in any way. Members of the Labour Party, along with other politicians, have already expressed strong opinions, saying that a full ban on credit card gambling would be the best course of action.
If imposed, the outright ban, however, is expected to have negative effects on the gambling industry in the UK. The sector has recently seen several major blows, with the latest one looming in just a few months. In October, the Remote Gaming Duty (RGD) will be increased from the current 15% to 21%. The increase in the RGD rate will affect all online gambling operators who are licensed to operate in the UK.
Meanwhile, the industry is still experiencing the aftermath of the reduction of the maximum stakes on fixed-odds betting terminals (FOBT). Up to a quarter of UK high-street betting shops are slated for closure as a result of the FOBT restrictions, which came into force in April after concerns that the betting machines were linked to gambling addiction.