{"id":89995,"date":"2025-07-25T00:29:18","date_gmt":"2025-07-25T00:29:18","guid":{"rendered":"https:\/\/www.europesays.com\/us\/89995\/"},"modified":"2025-07-25T00:29:18","modified_gmt":"2025-07-25T00:29:18","slug":"credit-card-bans-common-sense-or-nonsense","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/us\/89995\/","title":{"rendered":"Credit card bans: common sense, or nonsense?"},"content":{"rendered":"

Jon Bruford considers whether credit card bans are a logical response, an emotional one, or something completely different \u2013 and what the industry should think about them. <\/strong><\/p>\n

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\u2019t have, which assumes this is a stepping stone on a downward path \u2013 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? \u00a0<\/p>\n

If it\u2019s emotional, it\u2019s essentially an appeasement to people that want gambling reined in and the vulnerable (and non-) to be protected to the ultimate degree.\u00a0\u00a0<\/p>\n

Of course, it could be both emotional and logical, they\u2019re not exclusive paths. But it\u2019s not, or this would be a really short article, and it\u2019s not.\u00a0<\/p>\n

I\u2019ve spoken in the past about how having too many middle-class voices in the media, on the regulatory side, and within the industry\u2019s critics (and arguably within the industry itself) means there is a disconnect between well-intentioned player protection and real-world player protection. \u00a0<\/p>\n

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?\u00a0<\/p>\n

UK gambling credit card ban a \u2018partial\u2019 success<\/p>\n

I had in mind that a credit card ban was the ultimate \u201cmiddle-class speaking down to working-class gamblers\u201d protection. In Europe, my home market of the UK was the first to bring in a ban back in 2020<\/a>, and the Gambling Research Exchange Ontario has since commissioned an analysis<\/a> of the ban\u2019s implementation and efficacy.\u00a0<\/p>\n

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 \u2013 as defined here in GREO\u2019s own summation<\/a> \u2013 it was a partial success. A little like grenade-proof underpants, you might say. \u00a0<\/p>\n

Implementation got a big green tick, but \u201cthe increased friction imposed by the credit card ban did not always result in changed patterns of gambling\u201d. That the study\u2019s period coincided with Covid 19 probably didn\u2019t help the figures much, either, but they worked with a perfectly solid sample size and made every effort to provide a meaningful report. \u00a0<\/p>\n

Perhaps most interesting though, combined with the previous quote, is this: \u201cOverall, the ban was perceived to be a positive change by people who gamble; friends and family affected by gambling; and gambling treatment\/support providers.\u201d\u00a0<\/p>\n

Perception<\/strong>\u00a0of credit card bans<\/p>\n

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<\/a>, and several other countries are looking at links between credit card betting and problem gambling behaviours.\u00a0\u00a0<\/p>\n

Sweden, which is no stranger to over-regulation and driving players offshore, proposed expanding its current credit card betting ban in June this year<\/a>.\u00a0\u00a0<\/p>\n

Swedish finance minister Niklas Wykman said bluntly that players \u201csimply should not bet with borrowed money\u201d. Right, because a credit card is the only way that this can happen.\u00a0<\/p>\n

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. \u00a0<\/p>\n

So in terms of player protection, a credit card ban might be shooting the player in the foot \u2013 then reloading the gun and handing it back to them to see if they fancy shooting the other foot, too.\u00a0<\/p>\n

As industry expert Sarah Ramanauskas notes: \u201c[NatCen] found something really interesting: for people who weren\u2019t struggling with gambling, the ban was fine. They just stopped using credit cards, no issue.\u00a0<\/p>\n

\u201cBut for those experiencing moderate or high-risk gambling problems, the behaviour didn\u2019t 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\u2019t 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.\u201d\u00a0<\/p>\n

Other forms of borrowing for gambling<\/strong>\u00a0<\/p>\n

Alternative borrowing paths can be problematic \u2013 and outside any mechanisms that exist currently to try and monitor player behaviours. \u00a0<\/p>\n

\u201cUltimately, people who are desperate to win back the money they\u2019ve lost will do anything to try. That\u2019s 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\u2019t see,\u201d Ramanauskas adds.\u00a0<\/p>\n

\u201cAt least with credit cards, FCA processes exist to monitor and protect vulnerable consumers. Payday lenders don\u2019t operate with the same oversight and they don\u2019t care about exploiting vulnerable customers.\u201d\u00a0<\/p>\n

And banks and traditional lenders \u2013\u202fthanks, it seems, largely to GamCare\u2019s work \u2013 are becoming more active in looking at what we\u2019re doing with our money, it seems.\u00a0<\/p>\n

Graeme Cumming, vulnerable customers strategy manager at Santander, says: <\/strong>\u201cAt Santander, we believe that the bank, although not responsible, does have a part to play in gambling harm prevention<\/a>. We have built a suite of interventions, including letters and text messages,\u202fto provide timely signposting to support for customers at risk of financial detriment due to their gambling.\u201d\u00a0<\/p>\n

How responsible are UK credit cards users?<\/strong>\u00a0<\/p>\n

According to the UK Finance January 2025 report<\/a>, the UK has 53 million credit card accounts \u2013\u202fthat\u2019s more than one per adult \u2013 and, of those, 36.5 million had an outstanding balance after month\u2019s end. Which means that 17 million card accounts didn\u2019t have any balance rolling over, they were cleared in full at the end of the month. That\u2019s pretty decent in a cost-of-living apocalypse.<\/p>\n

Miraculous, even. And it suggests an awful lot of people use credit responsibly \u2013 so why are credit cards used for gambling? <\/p>\n

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: \u201c[Credit cards were] never designed as a two-way transactional medium.\u00a0<\/p>\n

\u201cIt doesn\u2019t necessarily do what it\u2019s intended to do. That\u2019s my thinking. Is it a good idea that people gamble with money they don\u2019t have? No, it\u2019s not a good idea. Of course it\u2019s not. Does stopping credit cards stop people from gambling with money they don\u2019t have? No. <\/p>\n

\u201cDoes it stop people with a problem with gambling? Gambling with money they don\u2019t have doesn\u2019t stop them. No, absolutely not.\u201d\u00a0<\/p>\n

Not a two-way street<\/strong>\u00a0<\/p>\n

So it\u2019s inefficient \u2013 because of that two-way street thing, credit cards don\u2019t 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. <\/p>\n

But a gambling transaction isn\u2019t 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\u2019s not simple is often expensive. <\/p>\n

This, however, is changing, as Jonathan Michaels, principal of Michaels Strategies, explained to us. \u201cIt\u2019s 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,\u201d he says.<\/p>\n

Credit card acceptance rates <\/p>\n

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.<\/p>\n

\u201cThere 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,\u201d Michaels notes.<\/p>\n

\u201cIn the US, gambling transactions have the Merchant Category Code 7801. When you try to deposit with a credit card, the bank sees it\u2019s 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.\u00a0<\/p>\n

\u201cAnother issue is cash advance fees. Using a credit card to deposit for gambling typically triggers a cash advance fee, which can be significant \u2013 sometimes $20-$30 per transaction. Many consumers aren\u2019t aware of this.\u201d\u00a0<\/p>\n

This fee brings us to one of the reasons the industry often cheekily (and quietly) doesn\u2019t mind a credit card ban so much: chargebacks.\u00a0<\/p>\n

Two categories (identifying chargebacks)<\/p>\n

If you\u2019re not familiar with chargebacks \u2013 and honestly, I wasn\u2019t \u2013 Nick Imperillo, GeoComply\u2019s risk services manager, explains the two types perfectly and highlights the fact that some players might be operating from a more\u2026 cynical starting point with a chargeback.<\/p>\n

\u201cWhen we think about chargebacks in the gaming space, there are actually playbooks out there \u2013 sometimes on the dark web, but honestly, even on places like Reddit \u2013 where you can find guides on how to \u2018win\u2019 your chargeback if you decide to dispute a charge with an operator,\u201d says Imperillo.<\/p>\n

\u201cChargebacks generally fall into two categories. The first is first-party fraud, where the legitimate cardholder themselves makes a dispute with the merchant \u2013 whether it\u2019s gaming, Netflix, Uber Eats, or whatever it might be. Then there\u2019s third-party fraud, where you didn\u2019t actually make the dispute, but someone else used your card details and you end up reaching out to your bank for protection.\u201d<\/p>\n

First party fraud is often buyer\u2019s remorse<\/p>\n

He adds: \u201cWhat we hear from our partners \u2013 and what we see in our data \u2013 is that first-party fraud, which is often just buyer\u2019s 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.<\/p>\n

\u201cYet they are the ones initiating these disputes with their banks, which the operators then have to fight. And it\u2019s 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.<\/p>\n

\u201cEven if I didn\u2019t have a chargeback problem, it was still a looming requirement and an important signal for how well I was evaluating risk on individual accounts.\u201d\u00a0<\/p>\n

Chargebacks aren\u2019t \u2018catastrophic\u2019<\/p>\n

Chargebacks are sometimes talked about as a significant issue (and I don\u2019t doubt for one moment they\u2019re a pain),\u202fbut in the US, Michaels suggests that credit card payments make up only about 5%-10% of the transaction volume.<\/p>\n

It\u2019s not insignificant, but would losing that really cause pain? \u201cThey\u2019re 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\u2019t recognise a transaction and claim it wasn\u2019t them,\u201d Michaels says.<\/p>\n

Michaels also makes a great point \u2013 would operators really lose that 5%-10% of business if they couldn\u2019t deposit with a credit card?<\/p>\n

\u201cMost gambling operators offer a wide range of deposit options \u2013 cards, open banking, PayPal, Venmo and more \u2013 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,\u201d he explains.<\/p>\n

\u201cSeveral states in the US \u2013 Massachusetts, Iowa, Tennessee, Maine and Connecticut \u2013 already restrict credit card deposits for gambling. Operators may eventually block credit cards nationwide just to simplify operations.\u201d\u00a0<\/p>\n

Are players protected through credit card bans?\u00a0<\/p>\n

So we come back to player protection when we wonder about the viability and efficacy of a credit card ban. \u202fSarah Ramanauskas\u2019 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.<\/p>\n

She elaborates: \u201c[A ban] also depends on what a credit card represents to someone. For some, a credit card isn\u2019t really \u2018credit\u2019 because they pay it off each month without stress. For others, particularly those struggling financially, a credit card represents breathing space \u2013 an ability to buy necessities or keep going. When you\u2019re living pay cheque to pay cheque, a credit card is very much money you don\u2019t have and will need to pay interest on.\u00a0<\/p>\n

\u201cIf you\u2019re 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\u2019s 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\u2019s account, if they\u2019re financially secure or if they\u2019re hiding from the window cleaner because they can\u2019t afford to pay him? That\u2019s where well-designed affordability checks should come in.\u201d\u00a0<\/p>\n

Credit card use doesn\u2019t always mean gambling problem<\/p>\n

And Michaels reminded us of a study done when he worked for Sightline. \u201cWhen 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,\u201d he notes.<\/p>\n

\u201cPayments 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.\u201d You can read more about this study here<\/a>, but ignore the hilariously hyperbolic headline.\u00a0\u00a0<\/p>\n

The last word (almost)\u00a0<\/p>\n

The last word in this article \u2013 apart from mine \u2013 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.\u00a0<\/p>\n

Now, you remember I said we would come back to people gambling on credit and credit being in many forms? Overdrafts are also \u2013 without question \u2013 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.<\/p>\n

It detailed over 74,000 deposits (not players, individual deposits), covering perhaps 10,000 players \u2013 however, don\u2019t 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\u2019t give balance data and it\u2019s all from the second half of 2024.\u00a0<\/p>\n

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. <\/p>\n\n\u00a0\u00a0\u00a3<\/td>\nIn credit\u00a0<\/td>\nOD > 100\u00a0<\/td>\nOD 100-500\u00a0<\/td>\nOD 500-1k\u00a0<\/td>\nOD 1k+\u00a0<\/td>\nAll\u00a0<\/td>\n<\/tr>\n\nNum deposit\u00a0<\/td>\n71545\u00a0<\/td>\n585\u00a0<\/td>\n1011\u00a0<\/td>\n655\u00a0<\/td>\n406\u00a0<\/td>\n74202\u00a0<\/td>\n<\/tr>\n\nAvg deposit<\/td>\n21.09\u00a0<\/td>\n15.86\u00a0<\/td>\n16.53\u00a0<\/td>\n15.77\u00a0<\/td>\n19.57\u00a0<\/td>\n17.764\u00a0<\/td>\n<\/tr>\n\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n<\/tr>\n\n% num deposit\u00a0<\/td>\n96.42%\u00a0<\/td>\n0.79%\u00a0<\/td>\n1.36%\u00a0<\/td>\n0.88%\u00a0<\/td>\n0.55%\u00a0<\/td>\n\u00a0<\/td>\n<\/tr>\n

That\u2019s a huge figure \u2014 surprisingly so given the ubiquity of overdraft agreements. Also, interestingly, the average deposit from a credit balance was \u00a321.<\/p>\n

The other 3.58% were minimally overdrawn, as Cohen explains: \u201cMost were overdrawn by less than \u00a3100, and only 0.55% were overdrawn by more than \u00a31,000. Interestingly, 1.3% were overdrawn between \u00a3100-\u00a3500, which is where most overdrafts typically sit.\u201d\u00a0\u00a0<\/p>\n

Credit card bans don\u2019t stop credit use for gambling<\/p>\n

But\u2026 wait for it\u2026 \u201cHere\u2019s the key: the average deposit size is lower for people in overdraft than for those depositing from a credit balance.\u00a0<\/p>\n

\u201cThe data here shows a simple truth: credit card bans do not stop people from using credit to gamble.\u00a0<\/p>\n

\u201cThe 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.\u00a0<\/p>\n

\u201cIronically, people may be in a stronger position if they gamble on a credit card because they can claw it back through a chargeback.\u201d\u00a0<\/p>\n

The (actual) last word\u00a0\u2013 credit card versus overdraft<\/p>\n

He sums it up succinctly: \u201cThe main beneficiaries of a credit card ban aren\u2019t vulnerable customers, but gambling companies, as they no longer have to deal with costly chargebacks.\u201d\u00a0<\/p>\n

Sure, it can be argued a credit card and an overdraft are different things \u2013 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\u2019t have.\u00a0\u00a0<\/p>\n

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\u2019t have, you\u2019re going to have to look much further and wider to do that \u2013 but also remember that you\u2019re removing an easily traceable, monitored and regulated form of payment. <\/p>\n

Nonsense over common sense<\/p>\n

As Sarah Ramanauskas says, the ban partly makes an operator\u2019s life a little harder too, and hamstrings us from some player behaviour data: \u201cNow, with the ban in place, operators have to trace the source of funds going into a player\u2019s debit card. It complicates the process of understanding where the money is coming from, making it harder to monitor harmful behaviours.\u201d\u00a0<\/p>\n

The next time a credit card ban is mooted in a market, the industry might quietly cheer because it\u2019s 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\u2019s another story) and, yay, no more chargebacks.\u00a0<\/p>\n

To answer our initial question though: common sense or nonsense? I\u2019m leaning strongly towards nonsense. It\u2019s mostly performative, stops player data gathering that could be really useful and absolutely does not stop people gambling with money they don\u2019t have.<\/p>\n

It\u2019s a thumbs down from me, Jeff.\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"Jon Bruford considers whether credit card bans are a logical response, an emotional one, or something completely different…\n","protected":false},"author":3,"featured_media":89996,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[36],"tags":[59942,871,59943,52471,59944,210,517,816,28466,59945,67,132,68],"class_list":{"0":"post-89995","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-mental-health","8":"tag-charles-cohen","9":"tag-credit-card","10":"tag-credit-card-ban","11":"tag-dot","12":"tag-geocomply","13":"tag-health","14":"tag-mental-health","15":"tag-payments","16":"tag-problem-gambling","17":"tag-santander","18":"tag-united-states","19":"tag-unitedstates","20":"tag-us"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/114911049415263643","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/89995","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=89995"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/89995\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/89996"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=89995"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=89995"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=89995"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}