Australia Set To Ban Credit Cards In iGaming
Online casino gambling and sports betting is as big Down Under as it is anywhere. In 2022, the iGaming sector in Australia is reported to have reached US$4.5 billion. It is predicted to grow to around $7 billion by 2028, according to a report from the IMARC Group. That’s why it has come as a huge shock to hear that the Aussie government is set to bring in a major change to how companies can operate. It’s a change that many jurisdictions have looked to enforce but one that is new to Australia. It’s also one that looks like it could change how people play and potentially somewhat curb the predicted upwards trajectory of online gaming revenues.
Soon, online casino Australia based players will be restricted when it comes to depositing cash. They will no longer be allowed to make deposits using credit cards. According to the Guardian, Michelle Rowland, the country’s communication minister, said, “People should not be betting with money they do not have”. This is a move that looks likely to have a big effect on the market as it currently stands. The same Guardian report explains that it is estimated that around 20% of online deposits are made using credit cards. A 20% drop on current figures represents nearly US$1 billion wiped off. That’s a significant drop and could easily usher in a period of uncertainty for casino operators.
Why is Australia Going Ahead With This Ban?
The short answer to that question is to ensure greater protection of players. Research presented by the UK’s Gambling Commission suggested that 22% of those using credit cards to deposit money at casinos or sportsbooks were problem gamblers. Based on their findings, a ban would effectively offer extra protection to around 176,000 people in the UK. Considering this, more countries are looking to enact bans of this kind to be proactive in harm minimization. As more importance is placed upon responsible gaming, these sorts of measures become ever more vital. And, in a market as diverse as it is popular, legislation is the only real method of enforcing good practices.
In fact, in 2021, the Australian government undertook a parliamentary inquiry to evaluate damage from problem gambling, and measures to help those affected. The inquiry is where the first proposal for the ban was made. Since then, the government has taken on board the recommendations and proceeded to enact them. Though this ban has been implemented, there were other much more extreme measures proposed, too. One such proposal was the complete ban of advertising for gambling operators. This has yet to be taken forwards at a federal level. However, if the ban on credit card usage is anything to go by, it seems that the Australian government is open to any and all suggestions to effectively regulate its burgeoning iGaming industry.
How Will a Credit Card Ban Work?
The most important aspect of any sort of legislation is its implementation. As it stands, there is not yet an official method approved for use. Instead, the mechanism used to ban credit cards will be decided following a period of consultation between government officials and stakeholders from the industry. It is likely that the government will look to push ahead; using Bank Identification Numbers (BIN) to block any credit cards depositing cash. Each bank has its own identifiers that are registered and easily verifiable. Furthermore, they will use separate identifiers for each of the cards they offer, whether they’re debit or credit. All the operators will have to do is block the identifiers associated with credit cards. While loopholes will exist in the form of credit transfers to debit accounts or cash withdrawals, this will provide a roadblock to those looking to directly use a non-debit card.
It must be said that this sort of ban is already in place for land-based casinos in the country. It isn’t an entirely new concept for casinos in Australia to block the use of credit in their venues, then. As such, this is more of an extension to existing legislation and regulation. And the Australian Banking Association has welcomed this extension, saying that there was an “absurd reality where someone cannot use a credit card at the betting counter […] but can sit at the same outlet and gamble on a betting app using a credit card”. However, this ban will not cover all forms of gambling. Lotteries will still be able to accept credit card deposits, even when this ban is enacted. It’s clear to see, though, that the Australian government is serious in its battle to minimize the harm presented by problem gambling.