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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

The potential impact on those not currently experiencing harm

The data gathered from our call for evidence, and the new research described above, is clear that not all credit card gamblers are currently experiencing harm. We know that around half of all individuals who used a UK-issued credit card for gambling in 2018 used them in only one month of the year; a third of engaged online gamblers are not currently experiencing harm, and the new 2CV research shows that half of credit card gamblers have a high or medium ‘gambling literacy’ score indicating a lower likelihood of harm.

However, we expect a reduction in harm resulting from a prohibition on credit card gambling will outweigh any negative impact on those not currently experiencing harm. The Commission will be working with research agencies to evaluate the impact of the ban on gamblers, and we acquired data during the consultation about consumers’ motivations for using credit cards for gambling which will be used to inform the evaluation.

That data showed that most who use credit cards for gambling (that is, use them instead of debit cards or other means) do so either for the added payment security afforded by credit cards; in order to accrue rewards offered by the card issuer; or simply because they do most of their spending on credit cards and they do not treat gambling any differently. However, it also showed that;

  • while 82% of credit card gamblers were not fully aware of the fees and interest accrued through credit card gambling transactions
  • three-quarters of all lower risk credit card gamblers are likely to be deterred from using their credit cards for gambling having now been made aware of the charges they might incur.

This indicates that the accrual of fees and potentially higher interest rates for gambling (that is, cash advance) transactions may be of a greater inconvenience to the cohort of lower risk credit card gamblers than a ban on credit card gambling itself.

42% of lower risk credit card gamblers said they would use their debit cards instead in the event of a ban; 41% said they would stop gambling. It might be expected that many lower risk gamblers would modify their gambling spend behaviour anyway (that is, move to debit cards or cease gambling) having been made aware of credit card charges.

There is also data exploring the motivations for using credit cards for gambling further in this document.

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