Credit cards and gambling: Banks move to be more responsible lenders

The momentum for a ban on using credit cards for gambling has been building for quite some time. In July last year, major bank Macquarie announced that customers would no longer be able to use their credit card for gambling. Shortly afterwards the Australian Banking Association (ABA) released a consultation paper asking for community views on the issue and now Bank Australia has followed in Macquarie’s footsteps.

The customer owned bank made the decision to ban the use of its credit cards for gambling, last week. Of course, this latest move from Bank Australia is not surprising, considering it is a B Corp certified financial provider and takes a strong stance on social issues. In fact, the bank sees this as merely an extension of its decision not to lend to the gambling industry. Plus, on its website it says 87% of Bank Australia customers support the decision and are concerned about the ‘harm caused by problem gambling.’

How does the ban work?

As of 1 December this year, Bank Australia customers will no longer be able to make gambling or gaming transactions with their credit cards. This includes payments for slot machines, online gambling, casinos, government lotteries, horse and dog racing.

For Macquarie bank, which already has a similar ban in place for its credit cards, transactions registered under the gambling merchant category are automatically blocked. Other financial providers which have a ban on credit cards and gambling include Suncorp, Bank of Queensland, Credit Union Australia (CUA), American Express and Citibank.

What about the big four?

To date, none of the big four banks, including ANZ, Commbank, NAB and Westpac have put in place a full ban on using credit cards for gambling. Commbank, NAB and Westpac do however, give customers the option to choose to put a gambling restriction on their card.

With Commbank this involves putting a six month block on most gambling transactions on either your debit or credit card. For NAB and Westpac a gambling restriction can be put in place for an indefinite period of time. Customers can cancel the ban at any time, but the request may take a few working days to process.

To request a ban Commbank and Westpac customers will have to call their bank. NAB customers can do so in the NAB banking app.

Finally, while ANZ does not have an optional ban on gambling, it does have some restrictions. ANZ may choose to decline a gambling transaction, if the customer has used 85% or more of their credit limit, or the transaction will take them to 85% or more of their credit limit.

Concerns over increased online gambling

In its consultation paper from last year, the ABA describes the ‘issue of customers using credit products to finance problem gambling’ as a ‘concern to ABA members.’ 

The ABA goes on to say that although state governments have introduced bans on using credit cards at physical venues, such as casinos and racetracks, online gambling is a growing concern. According to the paper, over 30% of Australians who gambled in 2018 did so online. The ABA says, “Online gambling creates an environment in which people can gamble at any time, in any place, and in a ‘cashless’ way.”

As part of its paper, the ABA looks at what other countries are doing to tackle the issue. For instance, the UK Gambling Commission passed a ban in April this year on businesses allowing consumers to use credit cards to place bets. The report also looks to North America, for which a 2006 law does not allow credit cards to be used for online gambling.

Future action

While the ABA has not announced any intention to put in place a ban, according to Bank Australia it has renewed the discussion with its members. It remains to be seen what the ABA will do in the future and whether other banks will follow suit.

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