Place Your Bets: UK Bans Gambling with Credit Cards

In an effort to reduce problem gambling behaviours, industry regulators are banning credit card usage; a decision which is going to harm the big betting companies. 

This April, a ban will be enforced on credit card usage for betting, following an increased concern for those with gambling addictions. Formerly this was only going to affect online gambling; however, The Gambling Commission have recently announced that the restrictions will also be applied to offline betting. It is thought that there are a staggering 24 million adults across the UK gambling, with 800,000 of those using credit card payments. More worryingly, it is thought that over half of these adults have problems with gambling and 22% of online gamblers using credit cards have been classed as problem gamblers. 

The logic behind the ban is that betting with credit cards encourages more risky behaviour as it is “invisible” money, meaning that the gambler is unaware of quite how much they are spending. This, in turn, raises the problem of borrowed money and debt from overdrawing their credit cards, leading to a wider economic issue and larger-scale debt problems for the country. 

The gambling industry in Britain employs over 100,000 people and made £14.4 billion at the end of the 2018-2019 financial year (taking into account the payout of winnings). Whilst the implementation of this ban will hopefully protect vulnerable gamblers, it has ramifications for the gambling companies and all those who they employ. Already large-scale betting companies, including PaddyPower Betfair, William Hill and Flutter Entertainment, have dropped in shares between 0.9% and 2.5%, a value that is only thought to grow once the ban is in place. 

Past efforts and regulations have been in place to reduce the amount of problem gambling behaviours including stricter ID checks for online gambling, increased resources for addiction support and capping bets at a maximum stake. However, these efforts have not been enough to combat the problem. 

Flutter Entertainment, which is said to own around one third of the whole UK online gambling market, is predicted to be most affected. In 2018, the company was thought to be worth an estimated £4.4 billion pounds. At this stage, it is difficult to know exactly how hard the hit will be. 

The only gambling product immune to these restrictions will be lotteries that are run for good causes. That being said, there will be an increased level of vigilance to ensure additional protection to vulnerable parties. Lottery tickets are allowed to be purchased using credit cards, in both newsagents and supermarkets, as long as they are purchased alongside other products. This exception has been made as a favour to retailers (so as not to prevent credit-card usage on a larger scale) and also because lotteries were found to have the lowest problem gambling rate. 

The ease and accessibility of online gambling has led to increased gambling, particularly problematic gambling behaviours, in recent years. By introducing this ban, industry regulators are hoping to see a significant reduction in these problem behaviours and damaging addictions.