In black and white banning credit cards from betting sites sounds like a smart way to stop people betting with money they don’t have, but in reality it’s far more complicated.
The UK made it mandatory for betting companies to not accept credit cards in 2020 and then a study by the National Centre for Social Research later called it only a “partial success”. Many people looking for a way to borrow money switched to payday loans or overdrafts which are much harder to track and for the consumer much more risky. For people that had no financial worries it made no impact as they would just use their debit card but for problem gamblers the behaviour didn’t really change.
This raises a debate with some saying the ban is logical, some emotional and some just symbolic. Many feel it shields vulnerable players and others just see it as a “middle class solution” and doesn’t mirror the behaviour of financially desperate people.
The problem with banning credit cards are as follows: people still borrow just from riskier sources, credit cards are regulated whereas other loans are not, valuable data is lost by operators which could help harmful behavior. Lastly credit cards have high fees, low acceptance rates and refund issues which make them very unpopular for gamblers.
Who benefits from the bans you ask? Not necessarily the players. Many argue it’s actually the gambling companies who are the winners as the ban removes costly chargeback costs when bettors claim money back from their bank.
The bigger picture from UK data shows most deposits already come from bank accounts in credit, not overdraft. The payment methods of overdrafts, klarna, payday loans and other soft credit are still used for gambling payments so the banning of credit cards doesn’t actually stop credit fuelled gambling it just makes it less noticeable.
To conclude this, banning credit cards looks good publicly and politically. Experts saying the ban is more about looking to be doing the right thing but in fact making things worse as its pushing people into high risk lending methods.