UK Gambling Commission: credit card ban from April 2020

Following their 2019 public consultation on a credit card ban, the Uk Gambling Commission (UKGC) yesterday announced the ban would go ahead.

The key question posed in the consultation was, should the UKGC introduce a prohibition on the use of credit cards for online betting?

A strong majority of responders answered yes. The UKGC also cited research indicating that 22% of credit card gamblers were problem gamblers as a further support to their decision.

So it is. From 14 April 2020, UK punters will no longer able to use their credit cards to gambling online.

From that date a new license condition will come into effect. Condition 6.1.2 – Use of credit cards, states:

Licensees must not accept payment for gambling by credit card. This includes payments to the licensee made by credit card through a money service business.

The prohibition won’t extend to debit cards (or pre.paid cards). It will however extend to payments via ‘money service businesses‘ – meaning e-wallets (or virtual wallets) such as Skrill, Neteller, PayPal and the like, where those payments are credit card linked.

E-wallets were always going to complicate the implementation of a credit card ban.

E-wallet accounts can be funded by cash (payments or bank transfers) or linked credit cards.  A CC ban is effectively useless if punters can simply circumvent it by depositing at their favourite online casino using a Skrill account that draws the money from their credit card.

So E-wallets are also out. UNLESS it is clear that the e-wallet funds do not originate from a credit card. In the UKGK’s words…

Operators would not be able to accept any payment through an e-wallet unless the e-wallet provider could demonstrably prevent the use of credit cards for online gambling through their wallets.

This it seems the e-wallets can easily do.

Their response to the consultation was that differentiating funds that are credit card originated, for the purposes of an outright gambling prohibition, won’t be difficult. It would be far more technically difficult to manage this differentiation in the case of arbitrary credit card limitations.

Limitations (eg identified players could only spend certain amounts using credit cards over certain periods) were mooted as an alternative to an outright ban. Technical difficulties in enforcing these limitations through the e-wallet pipeline maybe swayed the UKGC further in the direction of a complete prohibition.

Presently 10.5 million Britains gamble online. Many of them do so using their credit card. Not just because credit cards are a source of easy credit, but also because of the convenience and security they afford.

It remains to be seen, come April this year, how many of these punters will bother changing their online gambling funding methods, or simply give up playing?

When news of the ban broke Tuesday morning, share prices in listed net gambling operators dropped noticeably. But losses were recovered before trading day’s end. The market is guessing change is more likely than giving up.

Playing devil’s advocate, there is another option for punters who want to continue gambling online but use their credit card: play at non-UKGC licensed sites. Not a recommended option.