Some companies take advantage of the fact that gamblers go into debt to generate profits. A large source of this debt is from when gamblers use credit cards to top up their online wallets for use on gambling websites. In order to prevent citizens from getting into large amounts of credit card debt, a measure is being proposed to stop credit card use on these websites. A trade body representing gambling institutions of Australia has said that it is opposed to any legislation that would enforce the prevention of credit card usage for gambling purposes on online transactions.
Is Banning Credit Cards the Right Move For the Australian Online Gambling Market?
We are often critical of the Australian government’s stance on online gambling and the lack of insights and industry knowledge causing the current illegal gambling fiasco when players were once protected under EU laws via the Malta Gaming Authority (MGA) license. However, we have to say that the government has this one absolutely spot on. People should not be able to gamble using debt, and even those that are legitimately using their credit card and paying it off every month should understand that the ban is for the better of the industry and fellow country folk. Gambling using debt is always a recipe for disaster, especially for those that are chasing their losses and just end up losing. Plus, the debt is not good for the banks lending the money because there is a high risk of gamblers filing for bankruptsy!
In the UK, the UKGC banned the use of credit cards for any online gambling websites for the same reasons as the Australian government is doing the same. There are numerous reports from UK banks saying that debts written off due to gambling have been reduced, while also reports suggest there is now virtually no credit card debt are a result of online gambling aside from a few people that played at black market (not UKGC licensed) online casinos!
The current state of gambling laws in Australia
Stirling Griff, a Senator from the Centre Alliance Party unveiled the bill. He took a page from UK legislation, where a similar plan is being adopted. Under it, acceptance, or even promotion or facilitation of credit card usage for online gambling falls under a criminal penalty. As of now, only certain organisations are allowed to operate gambling activities online in Australia. These are limited to licensed bookmakers, TABs and betting exchanges. Chance games such as roulette or other casino-based games are not allowed by the nation’s authorities.
Online betting in-play (while a match is ongoing) for sports events, along with services that are offered by companies with a foreign license, is also illegal. The proposed bill would be the Interactive Gambling Amendment (Prohibition on Credit Card Use), for which a request for a Senate inquiry has been published by local authorities.
The trade body mentioned above, Responsible Wagering Australia (RWA), which represent the major gambling operators in the country, have of course been vehemently opposing the proposed restriction.
RWA Deny Link Between Problem Gambling and Credit Card Usage
Responsible Wagering Australia, who speak for large gambling corporations including Entertain, Sportsbet, Unibet, bet365 and Betfair, claims that there is a lack of evidence showing a link between policy failure and gambling from credit in the nation. They also say that problem gambling is linked to credit cards used to fund the customers’ activities is not based on evidence. In retaliation, many public interest groups hoping to reduce gambling-based problems in society (such as Relationships Australia, Alliance for Gambling Reform and Suicide Prevention Australia) have submitted claims showcasing the substantial negative effects that have emanated from gambling on the country’s residents.
Losses in the reaches of billions of dollars amongst other personal and social consequences are a direct result of the current policies they state. The ease of obtaining large amounts of money with which to gamble is a large point of contention. Though easy to acquire initially, credit cards often come with punishing rates of interest which regularly put their loanees into dire financial straits.
The Alliance for Gambling Reform submitted a case study based on exactly this, in which a person racked up AU$65,000 using their credit card. In addition, a study by the Australian Institute of Family Studies was cited, which indicated that using credit cards for gambling resulted in larger debts due to the higher interest rates.