UK Gambling Commission Warns Licensees Over Credit Rules
The UK Gambling Commission (UKGC) has warned banks and gambling companies that customer must be prevented using credit cards to fund accounts. Credit card gambling was outlawed in April this year.
The UK regulator has urged key players to ensure that customers are not circumventing rules on credit card gambling. The UKGC cited examples in which money service businesses (MSB) had been used to fund bookmaker accounts. It warned that operators should not accept any payment from an MSB unless safeguarding processes were in place.
The Commission took the unusual step of naming British financial technology company Revolut as an offender, claiming the online banking service failed to block customers from funding their accounts with credit cards. These funds could then be used for gambling activities.
The regulator said in a statement that “It is important for operators to ensure that the credit card ban cannot be easily circumvented by simply topping up an e-wallet or online money transfer account directly from a credit card, where those funds could then be used for gambling with very little friction in the transactional process,” The UK banned the use of credit cards for gambling on 14 April this year following the UKGC’s review of online gambling and the Government’s Review of Gaming Machines and Social Responsibility Measures. The Commission carried out a public consultation over four months between August and November last year.
The review showed that there are 24 million active adult gamblers in Great Britain and 10.5 million of those bet online. The number of punters that funded their accounts using a credit card was estimated to be 800,000. However, the report highlighted the fact that a much higher percentage of problem gamblers (22%) would use a credit card compared to non-problem gamblers (3%).
Neil McArthur said in January when announcing the ban that although he understood that some consumers used credit cards because they were convenient, the risk of harm to others was too high to allow the use of credit cards to continue. The Gambling Commission chief executive added:
We also know that there are examples of consumers who have accumulated tens of thousands of pounds of debt through gambling because of credit card availability. There is also evidence that the fees charged by credit cards can exacerbate the situation because the consumer can try to chase losses to a greater extent.– Neil McArthur, UKGC chief executive
He added that although the measure (banning credit cards) was likely to reduce gambling harm, other efforts were needed for it to work.
In the executive summary, which resulted from the consultation, the Commission state they considered two options. One was banning the use of credit cards; the other option was a restriction on their use.
The report concludes that the UKGC had decided to ban the use of credit cards for all forms of remote gambling (i.e. betting, gaming and lotteries) and non-remote betting. The Commission confirmed that the rule change meant an additional condition to the licencing rules. 6.1.2 use of credit cards read 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.