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Consultation response

Changes to licence conditions and codes of practice on the use of credit cards for gambling

Consultation response January 2020

Pre-paid cards

In view of some responses, we should clarify that pre-paid cards will not form part of the scope of the ban on gambling with credit cards, insofar as the ban will not extend to pre-paid cards as a payment instrument distinct from credit and debit cards.

We understand that a pre-paid card could in some circumstances be loaded via funds obtained from a credit card. However, the Commission’s key intention in banning gambling with credit cards is to maximise the levels of friction during the process of accessing and using borrowed funds for gambling, in order to reduce the risk of consumers experiencing harm from gambling with borrowed money.

We do not expect a ban to prevent the use of credit cards for gambling by wholly indirect means – for example, we acknowledged in the consultation that individuals intent on obtaining gambling funds from their credit cards could use those cards to withdraw money from a cashpoint. They might also try to load funds onto a pre-paid card via a credit card transfer or indeed through money withdrawn from a cashpoint via credit card.

However, it is important to note that such methods involve much greater levels of friction in the gambling transaction journey than simply using a credit card through either the gambling operator’s website or through an e-wallet that the operator makes available through their payment gateway.

We may consider further intervention if we become aware of any solutions in the payments market that enable relatively easy and frictionless means for consumers to use credit for gambling. We ask consumers and financial support charities to make us aware of concerns or issues they identify with any emerging payment method for gambling.

Consultation question 17

How long a lead-in time would you need to give effect to a prohibition on credit cards for gambling, i.e. so that your systems could prevent any transactions by credit card?

Consultation question 18

How long a lead-in time would you need to deliver controls measures and restrictions on the use of credit cards such as those described in the draft Ordinary Code provision 3.7.4 (i.e. instead of a prohibition)?

Consultation question 19

Are you able to provide an estimate of the costs that might be incurred by your business through implementing a prohibition on gambling with credit cards?

Consultation question 20

Are you able to provide an estimate of the costs that might be incurred by your business through implementing facilities to control and limit gambling with credit cards (i.e. instead of a prohibition)?

Respondents’ views

The larger remote betting and gaming operators provided divergent estimates as to the time they would need to prevent credit card payments. Estimates ranged from 3 to 12 months, although most larger operators typically indicated that about 6 months would be needed to meet a ban on credit card gambling, including the time needed for: technical development to prevent both new and existing customers from using credit cards; staff training and business preparation; updating the customer payment journey; and notifying customers of the change. One large remote operator indicated they would need only three months to deliver all such requirements. We understand that the major e-wallet providers would be able to deliver solutions in a relatively short space of time, although smaller challenger wallet providers may need several months.

Estimates of the time needed to deliver limits and controls instead of a ban ranged from 6 to 18 months. E-wallets were of the view that 9 to 18 months would be needed to deliver necessary solutions, depending on the extent to which certain responsibilities fell either with the operator or the wallet provider. Operators warned that other safer gambling work they were developing would need to be put on hold to deliver limits given such timeframes.

There were also significant differences in the estimates of costs that would be incurred in putting a ban or limits into effect. A number of operators said it would be too difficult to give a valid estimate at this stage, but those who provided figures estimated between £6,000 and £500,000 in costs would be incurred to implement changes needed for a prohibition of credit card gambling (noting that these figures exclude any projected revenue loss from a credit card ban). Estimates as to the costs of delivering limits instead of a ban ranged from £215,000 to £700,000.

Our position

We spoke to payment processors and the handful of online operators who have voluntarily chosen to prevent their customers from making deposits by credit card. We understand that, in the main, the systemic changes needed to prevent transactions by credit card are relatively straightforward to deliver. While solutions may of course differ between different payment processors and acquirers, we note that some businesses have only needed a matter of days to deactivate the acceptance of credit cards as a payment method.

Although there is likely to be high levels of demand placed by a large volume of gambling operators on a relatively small number of payment processors and acquirers to deliver a solution, we expect a notification period of 3 months to be sufficient for businesses to deliver technical and systemic changes to prevent gambling by credit card.

We anticipate that the major e-wallet providers in the gambling market will also have solutions available to deliver within this timeframe. Smaller e-wallet providers indicated that solutions to support a ban are generally available to them, but each would need to take a view as to whether they would develop a solution to prevent credit card payments for gambling or instead withdraw from the gambling market.

Operators will be responsible for only accepting payments through e-wallets where the operator can be satisfied that the payment has not originated from a credit card. We therefore urge operators to make contact with their third-party wallet providers whose payment facilities are made available through the operator’s website or app, to ensure they understand how the wallet provider intends to proceed.

We note a point raised by e-wallet providers that the Payment Services Regulations require them to give a minimum of two months’ notice to their customers of changes to terms and conditions. We therefore consider that a three-month lead-in period will be sufficient to accommodate this.

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