uk credit card ban gambling

Ban on UK Credit Card Gambling – An Opportunity for Direct Carrier Billing?

12 March 2020

The UK’s Gambling Commission has banned the use of credit cards for gambling services in Great Britain. The ban, which comes into effect on 14th April, aims to tackle problem gambling and protect vulnerable customers. All online and offline betting activities will be covered, except non-remote lotteries such as National Lottery tickets.

Neil McArthur, Chief Executive of the Gambling Commission believes that this new regulation will “minimise the risks of harm to consumers from gambling with money they do not have”, due to lack of credit card availability as well as lack of credit card fees. Both factors can intensify the situation in which problem gamblers may chase their losses to a greater extent.

The Rise of Online Gambling

On-the-go gaming and sports betting have grown over the past 10 years, with more customers accessing these services via mobile. Due to the ease of transaction, much of this growth has been driven by credit card payments.

24 million adults in Great Britain gamble, with 10.5 million of those gambling online. UK Finance estimate that 800,000 consumers use credit cards to gamble. According to the Gambling Commission, 22% of online punters who use credit cards are “problem gamblers”.

Remote (online) gambling is the largest sector in the industry holding 37% of the market, with GGY (gross gambling yield) totalling £5.3bn. Online games dominate, followed closely by remote betting through football and horse betting. The National Lottery (remote & non-remote) then follows with £3.1bn GGY.

According to the Gambling Commission 56% of gamblers hold more than one online account with 20% of those aged 18-24 actually having five accounts or more.

It’s no surprise that as of 2019 mobile phones became the most popular method of accessing online gambling, with 50% of all online gamblers doing so. Younger age groups are more likely to gamble on a mobile phone (76% of 18-24 year olds, and 72% of 25-34 year olds).

The Gambling World Isn’t Tapping Out Just Yet

The proposed licence condition would prevent gambling operators from accepting credit card payments either directly or through an e-wallet. With the responsibility falling on operators to only accept e-wallet payments where satisfied that the provider will take action to prevent payments by credit card.

Preventing vulnerable people from racking up credit card debts is undoubtedly a major step in the right direction, but it may not have a massive impact on bookmakers in the long term. It’s likely that most UK betting sites will continue as normal, with companies still able to offer many other popular payment methods to their customers.

It doesn’t seem like gambling is going anywhere, so alternative payment methods will inevitably be made use of. And with so many payment options out there, will credit cards even be missed?

The Odds Are in Favour of DCB

So, could this be an opportunity for direct carrier billing?

Gambling companies often use carrier billing as an on-boarding mechanism, “to allow people to engage in mobile gambling on the fly without an account” before then signing them up to a subscription service, or a credit card.

Direct carrier billing has a payment cap, in accordance with PSD2, therefore it may offer a responsible payment solution in place in credit cards, as sensible spending limits are already in place.

People are also so dependent on their mobile phones that it is unlikely that they’ll want to risk spending more on their phone bill than they are able to pay back.

Gambling operators can adopt carrier billing as a secure, responsible payment solution with the added benefit of engaging players through simple 2-click payment experiences, and opportunities to retain customers, gain access to new audiences, and boost revenues.

Contact SLA Digital today to add direct carrier billing to your goods or services.

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