iGaming credit card ban a fix for problem gambling, or just an inconvenience?
In the last two weeks, the iGaming headlines have been alight with news that some remote gambling jurisdictions may institute a ban on credit cards at internet casinos. First, the UK announced it was organizing a study to look into the matter. Then, the very next week, New Zealand‘s gaming regulators proposed a ban on credit card gambling deposits.
The fact that the UK is even considering it is, of course, going to raise a red flag for all responsible gaming jurisdictions. The UK operates is the world’s most functional and successful iGaming market, setting a high bar for others to follow. The topic we aim to deliberate on today is not whether such a ban will or will not be imposed, but rather…
Can an iGaming Credit Card Ban Fix Problem Gambling?
New Zealand’s Department of Internal Affairs (DIA), responsible for regulating all gaming activities within the island state, said quite clearly that its intent – should they follow through with it – is “to minimize harm” from gambling.
Whether eliminating credit cards from the deposit menu of online gambling sites will help in that effort is a topic of easily arguable debate on either side. On the one hand, a gambler who’s lost everything can use a credit card to continue wagering with money they don’t actually have; money that is intended to be paid back to the credit company, with interest. On the other hand, if one method of funding is removed, a problem gambler can and will find another method.
In fact, most of today’s credit cards can be used directly at an ATM to withdraw a “cash advance”; which, by the way, incurs an even higher interest rate than standard credit card purchases. A person could make that withdraw, then walk into their bank, deposit the cash, and use a debit card or bank wire transfer to fund their online gambling account.
In effect, if a ban on credit cards at internet casinos is imposed, it is unlikely to minimize harm so much as create an inconvenience for compulsive gamblers.
Does New Zealand Have a Problem to Begin With?
It’s worth noting that New Zealand residents currently rank among the lowest sufferers of gambling harm in the world. As such, the need for such extreme measures to encourage a reduction came as a bit of a surprise to industry analysts.
In its Problem Gambling 2018 report, the NZCT cited a study by Business and Economic Research Ltd (BERL) which compared the rates of at-risk and problem gambling behavior in New Zealand with other major countries. Percentage wise, New Zealand came in at just 0.3%, while neighboring Australia came in at 0.5-1%, UK at 0.6%, Norway at 0.7%, USA at 2.3% and Canada at 2.6%.
However, it’s not past results that the NZ-DIA is concerned with, but rather the impending launch of SkyCity‘s online gambling website.
SkyCity is the operator of New Zealand’s land-based casinos, SkyCity Aukland and SkyCity Queenstown. As such,m it has developed a report with the state’s gambling population. Thus, when its online casino launches later this year, it’s certainly beyond feasible that more New Zealanders will choose the SkyCity online casino as their iGaming destination of choice.
The problem with that is SkyCity Online is not launching from New Zealand, nor will it be regulated by local authorities. Its base of operations are in Malta, as are its regulatory obligations. Consequently, the DIA fears the people of New Zealand will flock to the internationally regulated gambling website, believing that it is held to the same integrity as its land-based operations, when that’s not the case at all. The DIA is worried that, without local monitoring, problem gambling could spiral out of control.