Australia’s Credit Card Ban for Online Casinos and its Ripple Effects

Gambling with the use of a credit card will become illegal across Australia very soon after a recent passing of legislation was introduced.

The Interactive Gambling Amendment (Credit and Other Measures) Bill 2023 was first introduced in September 2023. It has since gone through various processes to essentially enforce a complete blanket ban on using a credit card – as it is illegal to use one in a physical casino.

The legislation – which also looks to ban credit-related products and digital currencies – was passed by Australia’s House of Representatives in November before the Senate passed it on December 6. The next stage of the process is to have it receive royal assent. Once it does, a six-month transition period will then be experienced to allow everyone to get to grips with the new legislation and laws, including the operators and players who use the many pokies apps in 2024 that are available to use on their smartphone devices.

What does the bill contain and how can it impact the iGaming industry?

The bill that has been created and passed has been the result of a series of in-depth consultations with various stakeholders across the industry. The Responsible Wagering Australia (RWA) – an independent peak body for Australian-licensed wagering service providers – has been among the most vocal about the ban and its backing, as they have continually stated players should only ever be gambling with the money that they actually have and not take out credit to fuel the entertainment activity.

However, there has been criticism as the ban does not go wide enough regarding the games that can be played. Keno and lottery have both been excluded from the ban, meaning players can still use their credit cards to enjoy these options. According to the figures, these two games are the two in which the most money has been lost. As a result, campaigners have been calling for a complete ban.

In addition to the bans in place to prevent the usage of a credit card and digital currencies – which are seen as being well-suited for gambling activities – when making a deposit, several other aspects will also be introduced that need to be considered by everyone involved.

Operators can be penalized heavily if they are found guilty of not enforcing the new legislation and continue to allow credit card payments to be made once the transition phase has been completed. It has been revealed that a fine of up to AU$234,750 (£122,475/€143,003/US$154,282) can be experienced.

The new bill will also provide the Australian Communications and Media Authority (ACMA) with new abilities to enforce the rules, such as those related to the fines and punishments handed out.

Why has the Australian government acted on introducing the ban?

It is not new. The ban is something that has been discussed for a while. It is only normal for legislation to take a period for it to come in, with this one having taken several years to get to where we are today.

The initial stages of the bill came in November 2021 when the Parliamentary Joint Committee on Corporations and Financial Services made several recommendations regarding the possibility of banning credit card use for online gambling activities. A consultation had first been held in 2019 as Australia’s banks looked at how they could better protect those who used them.

In the spring of 2020, the desire for a ban grew even further when it was experienced in the UK. Some banks introduced their bans, but it is only a matter of time now where everyone will need to.

Among the reasons for the calls for a credit ban is gambling harm. Research that was taken in 2022 found that 46% of Australians 18+ who had gambled had been at risk or had already experienced gambling harm to some level. Around 25% of all gambling harm contributed to relationships, while 21% were to health and 19% were to emotional and psychological well-being. Of course, players who know about the risks and how to manage them can protect themselves, but they need to recognize why the government has decided to implement the ban.

What does this mean for gambling operators and players in Australia?

With the ban set to come in place, there will be questions about the industry and what it might mean in the future. While credit cards have often been among the most popular forms of payment method for many Aussies, they will still have many other accessible and convenient methods to choose from.

A debit card could be the way to go for many, as there are thought to be around 45.6 million active as of September 2023. Of course, not all players will want to use a debit card. Those who do not can use alternatives, including e-wallets and other safe payment methods.

If anything, the credit card ban should help promote a safer and more responsible gambling industry, as players will only be able to use the money they have. They will no longer be able to use funds they do not have, thus stopping them from potentially getting into debt and potentially changing consumer behaviour for the better.