Jon Bruford considers whether credit card bans are a logical response, an emotional one, or something completely different – and what the industry should think about them.
On the surface, a credit card ban for gamblers would seem to make perfect sense. In theory, it would stop people from gambling with money they don’t have, which assumes this is a stepping stone on a downward path – but the reality is nowhere near as simple. I started researching this article with a simple question in mind: is a credit card ban for gamblers an emotional or logical move from operators?
If it’s emotional, it’s essentially an appeasement to people that want gambling reined in and the vulnerable (and non-) to be protected to the ultimate degree.
Of course, it could be both emotional and logical, they’re not exclusive paths. But it’s not, or this would be a really short article, and it’s not.
I’ve spoken in the past about how having too many middle-class voices in the media, on the regulatory side, and within the industry’s critics (and arguably within the industry itself) means there is a disconnect between well-intentioned player protection and real-world player protection.
People who have never experienced crushing and inescapable poverty have generally not been in a genuinely hopeless situation, so how can they truly understand what a player is going through and why decisions are made?
UK gambling credit card ban a ‘partial’ success
I had in mind that a credit card ban was the ultimate “middle-class speaking down to working-class gamblers” protection. In Europe, my home market of the UK was the first to bring in a ban back in 2020, and the Gambling Research Exchange Ontario has since commissioned an analysis of the ban’s implementation and efficacy.
That analysis, done by the National Centre for Social Research (NatCen), asked whether the ban on cards created friction for players gambling with borrowed money (and we will come back to this idea later, certainly). Its findings showed that – as defined here in GREO’s own summation – it was a partial success. A little like grenade-proof underpants, you might say.
Implementation got a big green tick, but “the increased friction imposed by the credit card ban did not always result in changed patterns of gambling”. That the study’s period coincided with Covid 19 probably didn’t help the figures much, either, but they worked with a perfectly solid sample size and made every effort to provide a meaningful report.
Perhaps most interesting though, combined with the previous quote, is this: “Overall, the ban was perceived to be a positive change by people who gamble; friends and family affected by gambling; and gambling treatment/support providers.”
Perception of credit card bans
A credit card ban certainly appeals when it comes to perception and profile then. And other European countries have followed suit: the Netherlands has been trying to push a ban through (and given how regulation there has been, I would expect this to happen), Ireland has done much the same, and several other countries are looking at links between credit card betting and problem gambling behaviours.
Sweden, which is no stranger to over-regulation and driving players offshore, proposed expanding its current credit card betting ban in June this year.
Swedish finance minister Niklas Wykman said bluntly that players “simply should not bet with borrowed money”. Right, because a credit card is the only way that this can happen.
If you remove credit cards from the picture, you remove a relatively easy way to monitor source of funds, and players then potentially move to more cloak-and-dagger methods of moving funds into their gambling wallets.
So in terms of player protection, a credit card ban might be shooting the player in the foot – then reloading the gun and handing it back to them to see if they fancy shooting the other foot, too.
As industry expert Sarah Ramanauskas notes: “[NatCen] found something really interesting: for people who weren’t struggling with gambling, the ban was fine. They just stopped using credit cards, no issue.
“But for those experiencing moderate or high-risk gambling problems, the behaviour didn’t really change. They still borrowed money and still found ways to fund gambling through credit, just via different methods. So something meant to protect people wasn’t really protecting those most at risk. In fact, it might have made things worse, pushing people towards payday loans or unregulated borrowing instead of monitored Visa or Mastercard transactions.”
Other forms of borrowing for gambling
Alternative borrowing paths can be problematic – and outside any mechanisms that exist currently to try and monitor player behaviours.
“Ultimately, people who are desperate to win back the money they’ve lost will do anything to try. That’s what takes up all their mental energy and, if you ban credit cards, people will simply turn to other forms of borrowing that regulators can’t see,” Ramanauskas adds.
“At least with credit cards, FCA processes exist to monitor and protect vulnerable consumers. Payday lenders don’t operate with the same oversight and they don’t care about exploiting vulnerable customers.”
And banks and traditional lenders – thanks, it seems, largely to GamCare’s work – are becoming more active in looking at what we’re doing with our money, it seems.
Graeme Cumming, vulnerable customers strategy manager at Santander, says: “At Santander, we believe that the bank, although not responsible, does have a part to play in gambling harm prevention. We have built a suite of interventions, including letters and text messages, to provide timely signposting to support for customers at risk of financial detriment due to their gambling.”
How responsible are UK credit cards users?
According to the UK Finance January 2025 report, the UK has 53 million credit card accounts – that’s more than one per adult – and, of those, 36.5 million had an outstanding balance after month’s end. Which means that 17 million card accounts didn’t have any balance rolling over, they were cleared in full at the end of the month. That’s pretty decent in a cost-of-living apocalypse.
Miraculous, even. And it suggests an awful lot of people use credit responsibly – so why are credit cards used for gambling?
Andrew Tottenham, managing director for consultancy Tottenham & Co, suggests it might be a lot to do with convenience, certainly initially, but notes that as a payments device it is uniquely pretty poor for gambling purposes. He tells me: “[Credit cards were] never designed as a two-way transactional medium.
“It doesn’t necessarily do what it’s intended to do. That’s my thinking. Is it a good idea that people gamble with money they don’t have? No, it’s not a good idea. Of course it’s not. Does stopping credit cards stop people from gambling with money they don’t have? No.
“Does it stop people with a problem with gambling? Gambling with money they don’t have doesn’t stop them. No, absolutely not.”
Not a two-way street
So it’s inefficient – because of that two-way street thing, credit cards don’t work like debit cards. In many, many markets, a transaction has to be refunded to its originating source. You pay cash, you get cash refunded; pay with a card, a refund has to be made to that card.
But a gambling transaction isn’t a refund, and it has no good earthly reason to be put back on the card, so it becomes a pain for player and operator. And anything that’s not simple is often expensive.
This, however, is changing, as Jonathan Michaels, principal of Michaels Strategies, explained to us. “It’s shifting. Originally in the US, you had to withdraw using the same payment method to prevent fraud and money laundering. Now, operators try to find practical ways to handle this. Players who deposit using a credit card can often withdraw using another method if needed,” he says.
Credit card acceptance rates
Credit cards also have much lower acceptance rates, as Jonathan explains. His expertise generally involves the US, but the same principles can be applied almost globally.
“There are a couple of key issues with credit cards in gambling. First, acceptance rates are much lower than debit cards. Debit card acceptance in the US is about 95%, while credit card acceptance is around 50%-60%, because many banks simply refuse gambling transactions using credit,” Michaels notes.
“In the US, gambling transactions have the Merchant Category Code 7801. When you try to deposit with a credit card, the bank sees it’s a gambling transaction and can approve or decline it. Because gambling is considered high-risk, their risk triggers are more sensitive than for, say, buying gas or groceries.
“Another issue is cash advance fees. Using a credit card to deposit for gambling typically triggers a cash advance fee, which can be significant – sometimes $20-$30 per transaction. Many consumers aren’t aware of this.”
This fee brings us to one of the reasons the industry often cheekily (and quietly) doesn’t mind a credit card ban so much: chargebacks.
Two categories (identifying chargebacks)
If you’re not familiar with chargebacks – and honestly, I wasn’t – Nick Imperillo, GeoComply’s risk services manager, explains the two types perfectly and highlights the fact that some players might be operating from a more… cynical starting point with a chargeback.
“When we think about chargebacks in the gaming space, there are actually playbooks out there – sometimes on the dark web, but honestly, even on places like Reddit – where you can find guides on how to ‘win’ your chargeback if you decide to dispute a charge with an operator,” says Imperillo.
“Chargebacks generally fall into two categories. The first is first-party fraud, where the legitimate cardholder themselves makes a dispute with the merchant – whether it’s gaming, Netflix, Uber Eats, or whatever it might be. Then there’s third-party fraud, where you didn’t actually make the dispute, but someone else used your card details and you end up reaching out to your bank for protection.”
First party fraud is often buyer’s remorse
He adds: “What we hear from our partners – and what we see in our data – is that first-party fraud, which is often just buyer’s remorse, actually accounts for about 75% of chargebacks in the online gaming space. The people initiating these disputes are often verified users who have completed KYC, and due diligence has already been done on their accounts.
“Yet they are the ones initiating these disputes with their banks, which the operators then have to fight. And it’s absolutely a part of everyday operations. Before GeoComply, I used to run a fraud and AML team for one of the major North American sportsbooks, and chargebacks were one of the key metrics we used to determine the health of our risk management programme.
“Even if I didn’t have a chargeback problem, it was still a looming requirement and an important signal for how well I was evaluating risk on individual accounts.”
Chargebacks aren’t ‘catastrophic’
Chargebacks are sometimes talked about as a significant issue (and I don’t doubt for one moment they’re a pain), but in the US, Michaels suggests that credit card payments make up only about 5%-10% of the transaction volume.
It’s not insignificant, but would losing that really cause pain? “They’re a notable issue but not catastrophic. Generally, chargebacks run at about 0.6%-0.7% of transactions, which is lower than most ecommerce businesses but still material. Chargebacks can occur when consumers see the cash advance fee or don’t recognise a transaction and claim it wasn’t them,” Michaels says.
Michaels also makes a great point – would operators really lose that 5%-10% of business if they couldn’t deposit with a credit card?
“Most gambling operators offer a wide range of deposit options – cards, open banking, PayPal, Venmo and more – to meet players where they are. Would cutting off credit cards materially impact their business? Maybe, but it might not be the worst thing operationally,” he explains.
“Several states in the US – Massachusetts, Iowa, Tennessee, Maine and Connecticut – already restrict credit card deposits for gambling. Operators may eventually block credit cards nationwide just to simplify operations.”
Are players protected through credit card bans?
So we come back to player protection when we wonder about the viability and efficacy of a credit card ban. Sarah Ramanauskas’ point about players then using non-traceable funding sources is highly relevant, as it seems to be the main argument for not banning credit cards.
She elaborates: “[A ban] also depends on what a credit card represents to someone. For some, a credit card isn’t really ‘credit’ because they pay it off each month without stress. For others, particularly those struggling financially, a credit card represents breathing space – an ability to buy necessities or keep going. When you’re living pay cheque to pay cheque, a credit card is very much money you don’t have and will need to pay interest on.
“If you’re someone struggling financially and gambling, using a credit card feels like a temporary solution. To regulators, this is seen as bad, but for many people, it’s how they manage day-to-day pressures. The problem is, how do you tell the difference? How do you know, when looking at a gambler’s account, if they’re financially secure or if they’re hiding from the window cleaner because they can’t afford to pay him? That’s where well-designed affordability checks should come in.”
Credit card use doesn’t always mean gambling problem
And Michaels reminded us of a study done when he worked for Sightline. “When I was at Sightline, we did a study in Nevada on payments as a tool to identify problematic gambling behaviour. About 95% of players showed no issues, while 1% were high-activity VIPs, and another 1% made many small deposits with high failure rates, indicating potential risk,” he notes.
“Payments data, including credit card usage, can be a useful tool to identify risky behaviour, but using a credit card does not automatically mean someone has a gambling problem.” You can read more about this study here, but ignore the hilariously hyperbolic headline.
The last word (almost)
The last word in this article – apart from mine – has to go to Charles Cohen, of the Department of Trust. I asked his thoughts on credit card bans and he said to look at some data. So we did.
Now, you remember I said we would come back to people gambling on credit and credit being in many forms? Overdrafts are also – without question – a form of credit. We looked at a set of data gathered from 340 UK-licensed gambling sites covering sports betting, casino, bingo and poker.
It detailed over 74,000 deposits (not players, individual deposits), covering perhaps 10,000 players – however, don’t get that figure stuck in your head as the data covers six months, so players almost certainly deposited more than once. Some banks were also stripped out as they don’t give balance data and it’s all from the second half of 2024.
So what did we learn? 96.4% of all gambling deposits were made from bank accounts that were in credit at the time of the transaction.
That’s a huge figure — surprisingly so given the ubiquity of overdraft agreements. Also, interestingly, the average deposit from a credit balance was £21.
The other 3.58% were minimally overdrawn, as Cohen explains: “Most were overdrawn by less than £100, and only 0.55% were overdrawn by more than £1,000. Interestingly, 1.3% were overdrawn between £100-£500, which is where most overdrafts typically sit.”
Credit card bans don’t stop credit use for gambling
But… wait for it… “Here’s the key: the average deposit size is lower for people in overdraft than for those depositing from a credit balance.
“The data here shows a simple truth: credit card bans do not stop people from using credit to gamble.
“The world has moved on since credit card bans were introduced. Now you have non-traditional credit sources like Klarna, payday loans and soft credit, often unsecured and unregulated, that can be used for gambling just like a credit card.
“Ironically, people may be in a stronger position if they gamble on a credit card because they can claw it back through a chargeback.”
The (actual) last word – credit card versus overdraft
He sums it up succinctly: “The main beneficiaries of a credit card ban aren’t vulnerable customers, but gambling companies, as they no longer have to deal with costly chargebacks.”
Sure, it can be argued a credit card and an overdraft are different things – but the point for bans already in place, and those looming, is to create friction for players and for this friction to make it unappealing to play with money they don’t have.
Credit cards are just one of those potential avenues, one that you could argue is really only a cul-de-sac, and only that because of the convenience of availability with adults worldwide. If you want to stop people playing with money they don’t have, you’re going to have to look much further and wider to do that – but also remember that you’re removing an easily traceable, monitored and regulated form of payment.
Nonsense over common sense
As Sarah Ramanauskas says, the ban partly makes an operator’s life a little harder too, and hamstrings us from some player behaviour data: “Now, with the ban in place, operators have to trace the source of funds going into a player’s debit card. It complicates the process of understanding where the money is coming from, making it harder to monitor harmful behaviours.”
The next time a credit card ban is mooted in a market, the industry might quietly cheer because it’s a headache removed, there is little to no evidence of players disappearing after a ban (other than to offshore casinos that take credit cards, but that’s another story) and, yay, no more chargebacks.
To answer our initial question though: common sense or nonsense? I’m leaning strongly towards nonsense. It’s mostly performative, stops player data gathering that could be really useful and absolutely does not stop people gambling with money they don’t have.
It’s a thumbs down from me, Jeff.