Australia finally closes credit card gambling loophole

Australia has had some of the toughest laws on gambling and yet, the country has let a glaring loophole escape its regulatory reach for years – no more, says Australian Minister for Communications, Michelle Rowland, who has confirmed on Friday that gamblers will soon no longer be able to use credit cards to place online wagers.

"Soon," though is a stretchy term. Rowland promises that the federal government is going to introduce a regulation that will ban payments with credit cards for online gambling platforms in the coming months, but no deadline has been fixed. The issue though has been around for many years now.

In 2021, a parliamentary inquiry established that nearly 20% of all deposits placed with betting accounts were made via a credit card. The numbers were provided by Responsible Wagering Australia, an independent peak body. Tabcorp, a local operator, told the inquiry that 13.7% of all of its deposits came from credit cards during the 2021 financial year.

Once the new ban is implemented, though, online gambling rules should be aligned with those of the land-based gambling sector, which has already prohibited the use of credit betting.

Credit cards have been long regarded as a dangerous payment method in many jurisdictions, including in the United Kingdom, which banned them several years back. In the United Kingdom in particular, banks have been assisting gambling companies, and operators have been aware of secondary credit card deposits whereby an e-wallet has been funded with a credit card.

Now, Australia is also looking into possible ways to limit the use of credit cards for the purposes of gambling. One proposed idea is to block BINs, or Bank Identification Numbers, which would make it impossible to deposit directly into an online gambling platform. This measure has already been deployed in the country’s land-based industry.

Whichever way regulators and companies choose, the end goal is to ensure that credit cards cannot be used, says Rishworth. He has confirmed that a parliamentary committee on social policy is already looking into online gambling to come up with recommendations that can help the government deploy the changes in a manner that is efficient and that ultimately protects consumers.

Meanwhile, news that credit cards can be finally suspended from the gambling industry has been met with optimism. Alliance for Gambling Reform CEO Carol Bennet has said that the measure was long overdue, constitute a loophole, and the money people lost gambling with credit cards was money they could "scarcely afford to use."

Image credit: Unsplash.com