Australian banks pre-empting credit card net gambling ban
New laws banning the use of credit cards for online gambling are making their way through the Australian Parliament. Banks there are welcoming the move.
Credit Card Ban and Acknowledgement of Losses Bill 2023
It’s a mouthful. Actually the complete name is the, Interactive Gambling Amendment (Credit Card Ban and Acknowledgement of Losses) Bill 2023 (the Bill). It’s another amendment to the Interactive Gambling Act 2001 (the Act), of which there have been quite a few now.
The Bill has yet to pass through both houses of parliament, but is expected to without many/any amendments.
As its name suggests the key aims of the Bill are twofold: to ban the use of credit cards for online gambling, and to make sure players are acknowledging their losses.
Banning the use of credit cards for net gambling
The use of credit cards for gambling is widely recognised as a contributor to problem gambling in Australia. This is noted in the Bill’s explanatory memorandum which states:
The use of credit cards increases the risk of gambling harm by extending the pool of
available funds beyond the cardholder’s savings, so that the cardholder is gambling with funds they do not have.
Credit cards are already banned when it comes to funding traditional gambling channels – chips in terrestrial casinos and bets placed in retail betting shops. The Bill extends the prohibition to online, making it an offence for an ‘interactive gambling service’ provider to accept credit card payments from customers. Stiff penalties applying for those falling foul of the law.
Credit card payments are defines as
- payments by credit card or,
- ‘payment from an account or service that relies on the payment being made from a credit card linked to the account or service.’
The second part of the definition catches out the use of e-wallets such as PayPal, where the account is credit card funded.
There will be no problems buying lottery tickets online using credit cards. Lotteries are one of the exempted gambling services in the Act.
Acknowledgment of losses
Since mid 2022 licensed operators in Australia have been required to provide an activity statement for customers, detailing losses to that point in time. While punters can access these statements, they are typically not presented front and centre. Typically they are buried deep somewhere in players’ account details pages.
Under the new law, providers must ensure gamblers have expressly acknowledged their activity statement of losses before being allowed to place a bet.
The Bill’s progress, and copies of current versions can be found here.
The Banks are on Board
The Australian Banking Association has publicly welcomed the introduction of the credit card ban. CEO Anna Bligh noted the current situation, where credit cards can’t be used for terrestrial gambling but can for online made no sense.
“The new laws will overturn the absurd reality of someone not being able to use a credit card at the betting counter at a TAB outlet or pub – but still being able to sit at the same outlet and gamble on a betting app using a credit card”
She continued to say that a law change bringing consistency across all forms of gambling could not come soon enough.
As for the banks themselves, they seem to be readying customers for the coming change – introducing blocks of their own. NAB, one of the ‘big 4’ Australian banks has for weeks been advising customers of updates to its credit card terms. An excerpt from a recent mail out reads.
The UK experience
Regulators in the UK implemented a ban on credit card for net gambling in April 2020, reasoning preventing British residents from betting money they don’t (or many not) have will reduce the risk of harm.
Interestingly, the ban has not made a dent in that market. Quite the opposite. Industry stats released by the Gambling Commission show that the total gross gaming yield from the remote betting, casino and bingo sector increased 18.4% to £6.9 billion in the year April 2020 to March 2021, compared with the year immediately preceding the ban.
A comprehensive study into whether the ban has reduced the incidence of problem or harmful gambling has not yet been undertaken.
The Bill (now called the Credit Card and Other Measures Bill) has now passed through the House of Reps without any amendments. With support from both major Australian parties it is now expected to pass through the Senate
The Bill passed the Senate on 6 December and will now become law.
The Bill came into effect June 2024.
The use of credit cards (or credit card funded e-wallets) to fund an online gambling account is now banned Australia wide.