The UK Gambling Commission (UKGC) has announced a new measure banning credit card payments in online betting facilities. The new measure already received the full support of the BGC (Betting and Gaming Council), who is also behind the establishment of the “GAMSTOP” auto-exclusion system which will soon become a criterion for receiving a gaming license. The ban on transactions will apply both for online and offline betting facilities and is due to be enforced as early as April 2020. As expected, the announcement of the new measures created quite a stir in the stock market.
Given the announced modification of the UK Gambling Act, the commission has confidently decided to prohibit credit card payments on any type of activity evolving real money games. All betting facilities and instructions operating with a UKGC license have until the 14 of April 2020 to comply with the new act. According to trusted sources, the new measures are the direct consequences of an internal inquiry conducted on credit card transactions in the betting industry. The results of the inquiry concluded that around 22% of players using credit cards to make deposits are users diagnosed with excessive betting behavior.
Officially, this prohibition is seen as a necessary measure to protect the interests of problematic consumers susceptible to fall into the dangerous spiral of addiction. By enforcing the new restrictions, players won’t be able to play with credit money that does not belong to them. While on the other hand, the new act may also come as a nuisance for the remaining 88% of responsible players.
As stated by the commission in charge of statistics, it is estimated that around 800 000 players use credit cards as the main payment method in betting establishments. The sizeable number of transactions and the amount of money involved is considered very alarming by the UKGC. Hence, the urgent need to take immediate action to protect vulnerable consumers. Another reason for a ban in betting facilities is to prevent unsuspecting players from cumulating enormous debts toward banks or card providers. Check out the credit card usage statistics in the UK for a better understanding.
Online Gambling Market trend from 2018 to 2022.
As a guarantee for the success of the new user protection measures, the new act will also apply to land-based casinos and other real money gaming facilities. For physical establishments, the regulatory commission chose to tackle the issue from a completely different angle, with E-wallet transactions as the principal target. This could mean that corporations such as Skrill and PayPal could be affected by restrictive measures.
According to research conducted in February 2019 by the British based daily newspaper “The Guardian”, PayPal has given carte blanche to unmindful players to deposit over 176 000€ in a single day. Despite the warnings and limitations applied by their respective banks.
The reactions in the London stock market show how much big companies in the betting industry are directly concerned with the new measures. It is almost certain that this decision will have a devastating impact on the UK betting scene valued in billions of Euros. For instance, 888 saw its stock price plunged by 3.54%, and the early departure of its COF.