In 2020 the Australian Banking Association launched a study into the gambling community’s perception of gambling transactions. The collected data may contribute to what may be the end for credit cards as an online gambling transaction method.
The “Every Customer Counts” report gathered responses from 813 people who completed a web survey. Additionally, 40 consumer advocates, betting operators, gambling counsellors, government employees, and academics handed in written submissions.
The majority of respondents indicated that they found credit card-based gambling to be objectionable. An excerpt from the report reads, “The associated risks were considered to significantly outweigh any potential benefits for customers, especially for vulnerable populations.”
Crunching the numbers
Below is a summary of the collected data and while may or may not have some influence on future regulations, it is, at least, an informative snapshot of consumer attitudes towards transaction methods.
81% of respondents leaned towards some changes to current credit card gambling rules. Of this group, 54% felt a complete ban on using credit cards for gambling was necessary. The other 27% thought a daily limit on credit card gambling spend would suffice.
7% of overall respondents felt that any restrictions were unnecessary, and the remaining 12% were on the fence with no strong feelings either way.
The survey indicated that credit card gambling was most prevalent in the 18 to 29 age demographic with the practice declining sharply as the average age increased.
The ABA’s POA
The ABA has taken some steps towards modifying the rules around online gambling credit card usage. Unfortunately, an error in judgment on behalf of the association saw the findings of the “Every Customer Counts” survey released by ABA on the last Friday before Christmas, which significantly blunted the potential impact of the report. This blunted impact was further exacerbated by the conspicuous absence of an accompanying press release.
The ABA has been cagey about making a formal recommendation on the subject as taking a public position could translate to a violation of rules relating to collusion. The association has instead put the responsibility of making a decision n the hands of its banking membership.
The banks that comprise ABA’s membership have largely so far pushed back against calls for a total gambling-related credit card ban despite ABA surveys consistently showing that 75% of Australians want banks to protect their customers from debt related to gambling with credit.
Ball in the banks’ court
Regardless of the overall resistance of the member banks, some changes have taken effect.
October of 2020 saw Bank Australia announcing a block on “all gambling and gaming transactions” on their credit cards from December 1st, following a similar announcement from Macquarie Bank in June of 2019. Other banks that completely prohibit credit card gambling include Latitude Financial, American Express, Virgin Money, Suncorp, Citibank, and Bank of Queensland.
CBA and Westpac bank have both taken more liberal approaches, allowing customers to voluntarily block all gambling transactions on their credit accounts with a simple phone call. In contrast, NAB has focused on convenience, allowing its customers to activate a gambling block (including cash advances) via an app.
The four largest banks in the country have proven most resistant to any changes. NAB, Westpac, CommBank, and ANZ still provide cash advances for online gambling to their customers.
The current situation is a bit of an oddity as land-based Australian gambling facilities have banned the use of credit cards since the early 2000s. However, it does make sense in the context of the astronomical rise of online gambling in recent years. Sites like Ladbrokes and Sportsbet reported an average increase in business of around 45% over the first half of 2020.
