UK gambling regulator prohibits credit card use for online gambling transactions.
The Gambling Commission in the UK has decided to prohibit credit card use for transactions related to gambling. This ban will affect both the online and physical gambling sectors and will come into effect on April 14. This news has caused turbulence in the stock market. Let's have a look at the details.
Protecting Players
After reviewing last year's credit card transactions in the gambling industry, the UKGC concluded that 22% of online gamblers using credit cards were flagged as problem gamblers. Considering this, the ban has been introduced as a safety measure to prevent harm from gambling. An estimated 800,000 customers make payments through credit cards for gaming. CEO Neil McArthur believes that immediate action is necessary to safeguard vulnerable players. He stated on the BBC news channel:
"Gambling with credit cards can lead to significant financial damage. This ban we've implemented will minimize the risk for all consumers playing with money they don't possess."
To ensure complete protection for players, the ban extends to land-based gambling establishments as well. The primary target is the money transfers to online wallets, such as PayPal. While reading The Guardian in February 2019, problem gamblers were found to play up to £150,000 (€176,000) a day using payment services, despite having bank limitations.
Stock Market Impact
The news prompted a flurry of activity on the London Stock Exchange. Shares in companies like 888 Holdings were down by 3.54%, and the company's CFO resigned. Other companies, like Flutter Entertainment (owner of Paddy Power and Betfair) and GVC, suffered losses as well. While Flutter Entertainment recovered by 1.2%, Ladbrokes Coral owner GVC saw a 0.5% decrease, while William Hill fell 8%. At times, companies suffered massive losses of £500 million (€588 million).
Influence on the Industry
The stock market reaction demonstrates how sensitive companies are to announcements like this. The ban will undoubtedly have implications for the multi-billion-pound UK gambling industry with over 10,000 people employed in the online sector itself. Despite these potential risks and customer inconvenience, Chairman of the UKGC, Neil McArthur, remains steadfast in his commitment to player protection:
"We are aware that this change will cause trouble for those who use credit cards responsibly, but we believe that ensuring safety for others justifies the move."
BGC's Support
The betting and gambling association in the UK (BGC), established through a merger between the RGA and ABB last July, has endorsed the credit card ban. The BGC, which promotes a "safe and entertaining gaming experience," is chaired by Brigid Simmonds, a former CEO of the British Beer & Pub Association, a former member of the Sport England Lottery Panel, and a previous chair of the British Tourism Alliance. She has also been a trustee for the gambling protection organization, GambleAware. Regarding her new role in the gambling industry, Simmonds expressed her support for the incoming ban and added further measures:
"We will be instituting a ban on credit cards, alongside introducing measures such as age verification, harm features, affordability checks, additional research and treatment funding, as well as creating new codes of conduct to protect the consumer."
GAMSTOP Implementation
This new credit card ban follows the announcement in September that the GAMSTOP self-exclusion system will be a mandatory requirement for UK-based gambling companies starting March 31. The system is designed to help problem gamblers limit their gambling activities. Simmonds had lobbied hard for this, and the system will soon be recognized as an official partner of the Gambling Commission. Currently, over 50,000 people are registering with GAMSTOP.
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Source: www.onlinecasinosdeutschland.com
