UKGC Release Results On Credit Card Ban Consultation

The UK Gambling Commission (UKGC) has released the results of its full consultation and facts disclosure on its decision to ban gambling credit card transactions as of April 14, 2020.

The Commission claimed in a key 2020 judgement that its analysis was based on the goals of its ‘Business Strategy 2018-2021′ – to protect consumers’ interests, increase overall market standards, and strengthen UK gambling regulation.

Executive overview

The Commission released a ‘executive overview’ of its facts, which included all details and opinions about its decision to ban credit card transactions as of April 14, 2020.

The Commission held two separate consultations in 2019 – one on a ‘outright ban on credit cards’ and the other on ‘restricting the use of credit services’ – and obtained a total of 128 written responses from a variety of UK stakeholders, including consumer groups (21), financial institutions (8), charities (7), and local governments (4).

Gamcare and the Gordon Moody Association, two safer gambling organisations, organised and submitted responses from 71 and 15 individual treatment service users, respectively, to the Commission.

Meanwhile, licenced operators and trade associations from the gambling industry sent 19 written responses to the consultations.

Four main assessed areas

The credit card consultation examined four main areas of assessment: I possible harms, ii) dangers of customers borrowing to gamble, iii) operators’ affordability obligations, and iv) players’ use of digital payment systems like e-wallets and pre-paid cards.

“Credit cards are disproportionately used for gambling by individuals who are experiencing harm,” according to the data gathered.

A ‘tracker survey’ revealed that “22 percent of credit card gamblers were problem gamblers, 25 percent were experiencing moderate levels of harm, and 20 percent were experiencing lower levels of harm,” according to one response.

Furthermore, the Commission was presented with new data from research agency 2CV, which showed that credit card gambling is disproportionately correlated with those who may be at higher risk of injury, based on 475 credit card gamblers.

The Commission revealed that ‘some operators and financial services’ had questioned the credit card ban, but that their responses had failed to resolve the multi-faceted causes of harms that could be exacerbated by at-risk customers borrowing money to gamble.

Supporting the ban

The Commission supported the outright ban on credit card purchases as a move that will minimise the risks of damage by prohibiting customers 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” after considering all of the evidence submitted.

The Commission found that 82 percent of credit card gamblers were unaware of the fees and interest incurred as a result of their gambling transactions.

Following its decision, the Commission ruled that credit cards can no longer be used to finance online gambling accounts because they are ‘convenient and relatively frictionless.’

Given the clear link between credit card use and gambling damage, the Commission stated that it had a responsibility to protect at-risk consumers from accumulating debt as a result of using multiple credit cards.

FCA and UK Finance collaboration

Wider input urged the Commission to collaborate closely with the Financial Conduct Authority (FCA) and UK Finance on how gambling risks can be factored into the FCA’s consumer debt laws and policies.

The vast majority of respondents agreed that financial service providers could do more to help consumers avoid financial damage as a result of gambling.

Registered operators should collaborate with financial service providers to enhance customer tracking, affordability evaluation, and direct customer care interventions, according to the recommendations.