Interactive Credit Card Gambling Amendment on Track to Pass
The Interactive Gambling Amendment to prohibit the use of credit cards for gambling seems to be on track for passage in the Senate. A committee report is due 8 October, and it will produce data regarding the benefits of banning credit cards for gambling. If all information emerges as anticipated, the Australian Parliament will likely pass the bill quickly. The original opposition of the amendment seems to have fallen away, the latest dropped by Tabcorp.
Straightforward Gambling Amendment
The official title of the legislation is the Interactive Gambling Amendment (Prohibition on Credit Card Use) Bill 2020. The goal is to amend the 2001 Interactive Gambling Act and do several things:
- Prohibit interactive gambling service providers from accepting customer credit cards
- Create criminal and civil penalties for anyone accepting, facilitating, or promoting credit card payments for interactive gambling services.
- Authorize the Australian Communications and Media Authority (ACMA) to enforce and review the new requirements.
- The punishment for facilitating or promoting credit card payments is up to 500 penalty units, and the civil penalty is 750 penalty units. (A penalty unit is currently $222.)
- ACMA will conduct a statutory review after three years of ban effectiveness.
The bill will take effect six months after the bill receives royal assent.
It should be noted that the bill defines a credit card payment as a payment by credit card or an account or service that relies on the payment of a credit card linked to the account or service.
Awaiting Committee Report
South Australia Senator Stirling Griff conducted the first reading of the bill in the Senate on 25 August, 2020, with a second reading on the same day.
The bill stagnated due to opposition lobbying from gaming giants like Tabcorp. However, as banks began to indicate support for the measure – even implementing bans themselves – the Parliament moved on it. In March 2021, the Senate pushed the bill to the Environment and Communications Legislation Committee. They tasked the committee with conducting an inquiry and producing a report on the potential impact of a credit card ban on interactive gambling.
The original due date was 30 July, 2021, but the Senate granted the committee additional time for the report. It is now due 8 October, 2021.
Supporting Data from AGRC
In May 2021, the Australian Gambling Research Centre (AGRC) presented its research findings regarding credit card use for gambling. The Australian Institute of Family Studies (AIFS) assisted. They submitted the joint report to the Environment and Communications Legislation Committee in May.
The report begins with some information about online wagering in Australia. Some key points included:
- In 2011-2012, people placed 16% of wagers online. By 2017-2018, the number grew to 34%.
- Online gambling increased during Covid-19 lockdowns and limitations.
- One-third of AGRC survey participants signed up for a new betting account during Covid-19.
- One in 20 AGRC survey participants began gambling online during Covid-19.
- Credit card usage increase the likelihood of financial harm to high-risk gamblers.
- Increased credit card usage correlates with increased gambling problems.
- UKGC showed 36% of credit card gamblers had no other funds to gamble with.
- Credit card usage for gambling can negatively affect individuals and partners/family.
- Underage gambling risks increase for credit card purchases of online video game purchases.
Credit Card Data from AGRC
Currently, Australia prohibits patrons of gaming venues and casinos from using credit cards for gambling. The law also prohibits those venues from offering ATM cash advances. The issue in question with regard to the pending bill is credit card usage for online gambling transactions.
Banks started prohibiting their credit cards from being used for gambling transactions in 2019. Macquarie Bank was one of the first to issue such a ban, which became effective July 2019. Bank Australia agreed to do the same in October 2020. Others who did the same include Citibank, Bank of Melbourne, Bank of Queensland, Suncorp, CUA, Virgin Money, and American Express.
The AGRC report also noted that gambling transactions are simple to block by implementing a block on gambling-related merchant codes.
The UK was the first nation to institute a complete ban on gambling with credit cards online and in land-based establishments. The United States bans credit cards for online gambling, and other countries like Finland, Norway, Netherlands, and Germany have begun to roll out some prohibitions.
Support for Ban Grows
Tabcorp revealed in July 2021 that it will cease all opposition to the Australian credit card amendment to the gambling law. The massive gambling entity told the Senate committee that it realized the need to further protect vulnerable Australians during the pandemic.
In return, Tabcorp wants an assurance that local newsagents will still be permitted to sell lottery tickets to customers. The company also wants the Australian government to consider a national gambling regulator, one that will oversee the gambling industry across Australia. The current system relies on too many regulatory bodies, according to Tabcorp. All state regulators will then report to the national oversight body instead of operating only locally.
This month – August 2021 – Responsible Wagering Australia issued a statement regarding credit cards and digital wallets for online gambling. With the goal of fostering a discussion about the issue and working with stakeholders, RWA reported that “Australia’s major online wagering operators will support development of measures to prohibit credit card wagering.”
This move came in response to Tabcorp’s assurance to work with the government on the ban. RWA represents numerous Tabcorp competitors like bet365, Betfair, Ladbrokes, and Sportsbet.
This means that operators with RWA memberships agreed to work together to develop a modern technical solution to help banks implement the ban.
The industry-wide agreement should provide an easier path for the Interactive Gambling Amendment (Prohibition on Credit Card Use) Bill 2020 to pass before the end of 2021.