Embracing the ban

MuchBetter co-founder, Jens Bader, explains why we must embrace the credit card ban, despite its obvious flaws.

The Government recently announced the introduction of its long-debated credit card ban, a new law that is designed to protect consumers from spending money on online gambling via credit cards. The national headlines were accompanied by a flurry of tragic personal stories of problem gamblers who have maxed out cards and racked up thousands in credit card debt and the negative impact this has had on them and their families. Well intentioned as the new law is, and more should be done to prevent these kinds of scenario, I’m sure I’m not alone in spotting some pretty glaring loopholes in the Government’s new ban. In fact, I think it raises more questions than answers. Most importantly, will it actually work in the real world? Will it protect the people it is designed to protect?

While such a ban may have been wholly effective a decade ago, there are now so many more payment options available to players in 2020. The consequence is that banning credit cards may not have the desired effect, since the new rules can be so easily circumvented.

It is my firm belief that people with a serious gambling problem will simply use their credit card in conjunction with other permitted payment options to get around the ban. We’re talking about people who are willing to fund gaming accounts with a credit card in the first place, who are opening numerous credit card accounts and maxing out these cards as they chase their losses. Players can just as easily fund a prepaid debit card with their credit card and use their debit card for gaming. The new rules do nothing to stop this.

The Government is trying to demonstrate that it takes player protection seriously, and as such it cannot leave such glaring loopholes. These loopholes mean that the problem just continues to shift, but it does not go away.

How the industry will respond

From an industry perspective, it will be relatively simple for most gaming operators, payment companies or credit card operators to introduce new controls once the ban comes into force. This isn’t an issue of great technical or logistical complexity for payment companies and wallets with full control of their payment systems. They will manage this requirement to ensure no credit card can be used by a UK gambler, making them fully compliant. What remains the big open question is how general-purpose prepaid cards are handling the new rules. It will be more difficult for open-loop GPR cards and I expect credit gamblers to lean towards these cards as they will still allow loading via credit. Whether card issuers then disallow such loaded funds for 7995 transactions remains to be seen. This can’t be controlled by gaming operators, so if such a GPR card issuer does not voluntarily take action, there is nothing to be done. The problem shifts – it becomes slightly more difficult for players, but still quite easy to bypass.

Aside from the introduction of new technical controls, I also want to see the industry embrace these new rules on a more basic level and accept that they have been introduced for a reason – despite the flaws outlined above. In the past, the gambling industry has been quick to go on the defensive and fight new legislation tooth and nail. It has often damaged its reputation in doing so and invited further criticism / regulation. The industry already has enough detractors, and it’s important that companies take the credit card ban seriously. The last thing we want is negative headlines about operators or their payment partners that neglected to implement the right controls.

Only time will tell if the credit card ban has the desired effect of reducing harm to problem gamblers and preventing them from gambling on credit. I have my reservations, but I hope the gaming industry acts as one to embrace these new rules rather than fight them.