Australian banks have revealed that they support the decision of the ACT Government to suspend gamblers from using credit cards to fund online gambling transactions. However, their New Zealand subsidiaries seem to be taking a different position on the matter.
As Casino Guardian already reported, the Federal Government of Australia recently announced a decision to ban the use of credit cards for online gambling services in the country, after receiving the results of a 2021 parliamentary inquiry on the matter. Apart from that, the Australian Banking Association (ABA) has also urged lawmakers to do so, as its members believed credit cards were not a suitable product for providing credit for gambling services and their use could have a detrimental impact on local customers.
According to recent reports, the Labor Government is set to officially introduce legislation on the matter in the next few months, with the move expected to bring online gambling in line with other forms of gambling in Australia, which are not allowed to accept credit card transactions as a valid payment method since the 2000s.
Although the Australian Banking Association welcomed the move, the organisation’s chief executive officer Anna Bligh noted that the reform was long overdue. As she explained, the use of credit cards for gambling transactions could inflict serious harm on local residents because the use of credit cards could result in the accumulation of large amounts of debt in a short period, and that could be detrimental for problem gamblers who already find it difficult to control their gambling habits.
According to Ms Bligh, the reform would be really helpful to people who experience gambling-related harm as the credit card ban would allow them to better control their finances.
New Zealand Still Lacks Online Gambling Legislation
Although it has many of the same members as its equivalent in Australia, the New Zealand Banking Association (NZBA) does not seem much supportive of a similar measure.
According to the association, a credit card ban on gambling was not likely to have the initially intended effect to keep local gamblers from spending money they do not have and accumulating large debt. Furthermore, the organisation also claimed that New Zealand banks had not found evidence that customers who used their credit cards for online gambling transactions were more likely to default. The Association claims that a potential ban on credit cards would only encourage players to use other payment methods, such as debit cards, Paypal, AliPay, WeChat, tokens purchases on Trademe or eBay, etc. to fund their gambling online.
The New Zealand Banking Association shared that, in its opinion, requiring local Internet Service Providers (ISPs) to block certain providers of online gambling services would have a much bigger impact on tackling gambling-related harm.
As previously reported by Casino Guardian, New Zealand has been a preferred market by online gambling operators, especially ones based in foreign jurisdictions, because it is one of the few developed nations globally that still has enacted online casino and gambling laws. According to data provided by consultancy firm Regulus, the overall online gambling revenue in the country rose from NZ$139.3 million in 2014 to NZ$332.6 million in 2020, and could hit NZ$600 million by 2025.
DIA Contemplates on Credit Card Use for Online Gambling Transactions
The Department of Internal Affairs (DIA) has been considering the proposed online gambling legislation since 2019, but there has not been much progress still. Unfortunately, market experts believe that the upcoming election, combined with a recent ministerial change, which saw Barbara Edmonds replaced by Jan Tinetti, is unlikely to speed up any legislative changes, or at least for the time being.
The use of credit cards for online gambling transactions was included in a discussion paper that the DIA released at the beginning of the aforementioned review. There is still much to be done, however, as credit cards seem to be the main way to top up accounts with New Zealand’s online gambling providers.
As revealed by Newsroom, about 75% of the 182 submissions on restricting the use of credit cards for online gambling transactions supported the idea, with one of the participants claiming that the additional risks and costs involved in the process could be dangerous to gamblers before they even start to play. In a statement seen by the media hub, the chief executive of the NZBA, Roger Beaumont, shared that the group remains willing to get involved in any further work on the matter.
Still, there is a way to block credit card transactions for online gambling, with Kiwibank introducing an option to block certain transactions to the merchant codes of operational gambling websites back in 2021. Reportedly, customers who took part in the pilot program of Kiwibank at the time had a 75% success rate at keeping the suspension in place for more than three months.
On the other hand, the Bank of New Zealand’s submission noted that online gambling providers could circumvent blocks by changing their merchant category codes. Furthermore, it explained that customers could also get around the suspension by advancing money from their credit cards to other accounts, such as e-wallets, for example.
According to experts, one of the potential reasons why two quite similar banking associations take such different stances on the proposed credit card ban for gambling transactions might be that the CEO of the Australian Banking Association was previously a cabinet minister in the Queensland State Government at the time when credit cards were suspended for most other forms of gambling.
- Author
Olivia Cole
