The UK Gambling Commission (UKGC) has published its full consultation and evidence disclosure on its decision to ban gambling credit card transactions from 14 April 2020.
A key 2020 judgement, The Commission stated that its review had been undertaken focusing on the objectives of its ‘Business Strategy 2018-2021’ – to protect the interests of consumers, raise all-round industry standards and further improve UK gambling regulation.
Disclosing its evidence, the Commission published an ‘executive overview’ relaying all information and opinions regarding its decision to ban credit card transactions from 14 April 2020.
During 2019, the Commission launched two separate consultations examining an ‘outright ban on credit cards’ or ‘restricting the use of credit services’ – which received a total of 128 written responses from diverse UK stakeholders including consumer bodies (21), financial institutions (8) charities (7) and local governments (4).
The Commission noted that two safer gambling organisations, Gamcare and the Gordon Moody Association, coordinated and submitted responses from 71 and 15 individual treatment service users respectively.
Meanwhile, licensed operators and gambling industry trade bodies submitted a total of 19 written responses to the consultations.
The credit card consultation focused on four key areas of assessment – i) examining potential harms, ii) the risks of consumers borrowing to gamble, iii) operators’ duties on affordability and iv) players use of digital payment services such as e-wallets and pre-paid cards.
Data gathered cited that “credit cards are disproportionately used for gambling by individuals who are experiencing harm”.
One response, in particular, highlighted a ‘tracker survey’ indicating that “22% of credit card gamblers were problem gamblers, 25% were experiencing moderate levels of harm and 20% lower levels of harm”.
Furthermore, the Commission was presented with new evidence provided by research agency 2CV on 475 credit card gamblers, which demonstrated that credit card gambling is disproportionately associated with those who may be at higher risk of harm.
The Commission revealed that ‘some operators and financial services’ challenged the ban on credit cards – but stated that their responses failed to address the multi-faceted causes of harms that could be further deepened by financial hardships of at-risk consumers borrowing money to gamble.
Considering all evidence submitted, the Commission approved its outright ban on credit card transactions as a measure that will reduce the risks of harm by preventing consumers from gambling more than they can afford to repay; or “at the very least, it will add levels of friction to the process of gambling with borrowed money”.
Of interest, the Commission highlighted that 82% of credit card gamblers were unaware of the fees and interest accrued through credit card gambling transactions.
Further to its judgement, the Commission stated that it wanted to terminate credit cards as a ‘convenient and relatively frictionless’ payment service to fund online gambling accounts.
Given the strong evidence between credit card use and gambling harm, the Commission said that it maintained a duty to protect at-risk consumers from experiencing cumulative debt from multiple credit cards use.
Wider feedback advised the Commission to work closely with the Financial Conduct Authority (FCA) and UK Finance with regards to how gambling risks can be considered in relation to developing the FCA’s laws and policies on consumer debt.
The majority of respondents supported the principle that financial service providers should do more to help reduce the risk of customers suffering financial harm from gambling.
Suggestions included that licensed operators should adopt collaborative frameworks with financial service providers to improve customer monitoring, assessment of affordability and direct customer care interventions.