Casinos Suffer As UK Regulations Prohibit Gambling With Credit Cards

UK Casinos ban Credit CardsOn April 14, 2020, new regulations took effect in the UK prohibiting gambling or the funding of online gambling accounts through the use of credit cards. The new regulations were proposed and enacted after reviews conducted by both the UK government and the United Kingdom Gambling Commission (UKGC) concluded that a large percentage of people in the UK using credit cards as a source for gambling funds fell into the category of what they consider to be “problem gamblers”.

The press release that announced the change in regulations stated that the restriction “will apply to all online and offline gambling products with the exception of non-remote lotteries”.

Gambling Commission chief executive Neil McArthur explained the reasoning behind the ban saying: “Credit card gambling can lead to significant financial harm. The ban that we have announced today should minimize the risks of harm to consumers from gambling with money they do not have”.

Figures released along with the announcement to support the new restrictions show that about 24 million adults in the UK gamble regularly. Of those, about 10.5 million people gamble online. UK Finance estimates put the number of gambling consumers that use credit cards to fund their activities at about 800,000.

UK Culture Minister, Helen Whately, spoke about the decision saying, “Whilst millions gamble responsibly, I have also met people whose lives have been turned upside down by gambling addiction. There is clear evidence of harm from consumers betting with money they do not have, so it is absolutely right that we act decisively to protect them.”

UK Licensed Casinos Must Participate In GAMSTOP

The legislation that now imposes these credit card restrictions also requires all UK licensed online casinos to “participate in the GAMSTOP scheme and offer their customers the service from 31 March.”

GAMSTOP is the UK’s national self-exclusion service. Up until the end of March, participating in the program was a voluntary option for operators.

One More Blow To UK Gambling Operators

Many within the gambling industry believe this new ban on credit cards is just one more blow to already struggling operators. Not long ago, the UK government enacted a mandate that made it illegal for fixed-odds betting terminals (FOBTs) to accept any bets higher than £2. The previous maximum bet was £100. The result of the 98% cut was huge profit losses for bookmakers and an ensuing closure of hundreds of high-street stores.

When the massive cut to FOBT maximum bets proved to cause financial losses for the government as well, the response was a rate hike on the remote gaming duty for online casinos. Intended to make up for the tax money that the government was now missing, the remote gaming duty was bumped up from 15% to 21%—the third time it was raised within a four year period.

UK Gamblers Choices Are Shrinking

The fears that many industry insiders expressed at the time turned out to be right on the money. The growing expenses associated with running a gambling operation in the UK forced many smaller operators to either sell out to larger companies or simply give up and leave the market or shutdown. The end result is that UK gamblers have fewer and fewer choices when it comes to where they can place their bets.

Losing the ability to accept credit card payments will undoubtedly put more stress on already struggling operators who have managed to hang on so far. There’s no telling what the future will hold, but it seems extremely likely that UK players will be seeing their choice of legal gambling venues shrink even further in the coming months.