The UK Gambling Commission (UKGC) prohibited licensed operators from accepting credit card payments on the 1st of April 2020, either directly or through third parties.
Although there was some initial scepticism about it, the ban on credit cards may have saved the industry in different ways since about 22% of credit card users were problem gamblers.
There are five simple reasons why banning credit cards was the right decision. Let’s dive deeper into them.
#1: The Ban Encourages Responsible Gambling
The main reason for the ban by UKGC was to reduce the instances of borrowing to play games, which could lead players into unsustainable debt. A long-standing issue with the gambling market is that some players create avoidable debts for themselves. Banning credit cards for gambling closes off that source of potential loss and improves the overall industry quality. Over the years, this change has improved casino-client dynamics when it comes to playing responsibly.
The Financial Conduct Authority (FCA) wants to follow in the same direction by restricting companies from accepting credit cards as a means of payment for people to buy crypto assets. The regulatory action targets the reduction of hazardous financial practices as regulators express concern about investors’ exposure to the unpredictable cryptocurrency marketplace.
#2: It Protects Casinos and Gamblers from High Fees
Few people realise this, but credit card companies take a portion of every transaction, either from the users or the merchants. When you deposit or withdraw money from your casino through a credit card, the fees or commissions go straight to the credit card providers. In some cases, the casino must shoulder those fees because it costs money to accept credit and debit cards.
That’s why some casinos have hidden charges that gamblers only find out when it’s too late. However, the ban has settled this issue. Gamblers and casinos don’t have to pay high fees anymore, which makes transparency possible for all parties.
#3: The Ban Potentially Reduces Problem Gambling
Let’s face it: gambling can be addictive, especially with unrestricted access to funds. Most people with gambling problems cannot control the urge to take one more spin, place another wager, or deposit more funds. With credit cards, it gets easier to simply click one or two buttons and get more money. This way, you can quickly max out credit cards and then the debt spirals.
Here again, the UKGC’s bank shows foresight. As this research shows, most gamblers welcome the idea and hope it will have a positive effect.
#4: It Helps Gamblers to Manage Their Funds More Effectively
Gambling should only be done with disposable money, and even at that, responsible gambling requires effective bankroll management. Having capped access to gambling funds makes it easier for gamblers to manage their accounts and risks.
It is basic human psychology: we become better managers when there’s limited access to resources. In gambling, the gambler knows there’s only a fixed amount to spend, so they evaluate every spin, analyse each pick, and try to make the most of every wager. This, of course, increases the chances of winning.
#5: The Ban Increases the Industry’s Appeal
Gambling has always faced one form of opposition or another, and really, there’s little to fault opponents with. The responsibility to make gambling attractive rests on the shoulders of the casinos, regulators, and gamblers. Banning credit cards is a step in the right direction.
Although the decision may not have been popular in 2020, it is a masterstroke by the Commission. Removing credit cards is the biggest “we take our gamblers’ lives seriously” statement. It also shows that the regulators will concede any advantage in the face of protecting players and their families.
This is great as a long-term strategy to improve the public appeal of gambling and make it easier for people to accept it.
Are There Alternatives to Credit Cards?
Gambling continues to be a popular activity in the UK, with over 24 million adults involved in the industry. Based on regulations, anyone aged 18 and over can access casinos physically or online, so it makes sense that there are alternatives to credit cards for gambling payments.
Some of the best PayPal casinos are located in the UK. The reason behind the popularity of these casinos is that they allow gamblers to use PayPal, debit cards, and other permitted methods. The PayPal casinos incentivise deposits by offering generous bonuses.
Verdict: The Credit Card Ban Favours Safer Gambling
There’s no doubt: the ban on credit cards is good news for the gambling market. Over the last five years, the benefits have far outweighed the discomforts, so it’s a praiseworthy move from the UKGC.
