Credit card ban: what can the gambling industry do to prepare?

Last month it was confirmed that the use of credit cards for online gambling will be banned from April 2020. While the industry has anticipated this move for a while, it still signals a major shake-up.

Groups such as Citizens Advice and GambleAware have repeatedly called on the government and the gambling regulator to introduce bans on the use of credit cards over the past few years. While some measures have been implemented to try to encourage more responsible gambling (such as age verification and advertising restrictions), this new ban is a clear sign that the regulator and Gambling Commission will continue putting customers’ financial wellbeing at the top of the agenda.

If businesses in the industry wish to reduce the likelihood of more severe regulatory intervention in future, they must demonstrate that they take affordability seriously.

Research conducted by the Gambling Commission revealed that 22% of online gamblers using credit cards are classed as ‘problem gamblers’. Neil McArthur, Gambling Commission chief executive, added that “the fees charged by credit cards can exacerbate the situation because the consumer can try to chase losses to a greater extent”.

Media focus on this topic will likely result in an increase in enquiries from customers that have used credit cards to fund their gambling. These customers may request relief or cancellation of the debt accumulated, especially those who may now be fighting mounting debt.

There are several steps operators can take to ensure they are prepared for the possible increase in customer complaints, while also demonstrating that they are tackling the issue of affordability, helping customers to manage persistent debt and prioritising customer safety over profitability.

Clear communication

First and foremost, operators should be clear in their messaging following any regulatory change that directly impacts gambling habits. Clearer communication can improve customers’ understanding of the changes implemented, serving to lower the number of queries and complaints made. All communication channels, including social media, should have clear, aligned messaging and FAQs that leave no room for ambiguity regarding regulation. Proactive communications, tailored to a customer’s profile, are also crucial.

Operators should look to prioritise customers that are most likely to fall into persistent debt. Vulnerability is a topic high on many regulators’ agendas, after all.

By reassessing operational processes, gaming firms will be able to better identify which customers may require extra support and earlier intervention. This can be difficult, as people can often move in and out of challenging situations over time. However, by having the appropriate level of resource available, staff will find they have the time to evaluate each customer’s situation thoroughly.

A lot can be learned from similar regulatory intervention in other markets (consumer credit, in particular, is a sector in which persistent debt and affordability remain issues), so finding a trusted partner that can not only provide necessary resource but also share knowledge and experience is advised. This would help lenders demonstrate to the regulator they are not only prepared at an operational level but are willing to invest in the upskilling of employees. You want them to be able to identify customers most at risk of falling into persistent debt. Staff need to be agile and empowered, with access to appropriate data, if they are to appropriately identify affected customers, have difficult conversations and ensure fair treatment of customers.

This ban represents a clear and determined shift from the Gambling Commission. On their continuing mission to protect customers, their attention may now shift to other ways of safeguarding against dangerous habits, such as further scrutiny of gambling advertisements.

However, until the Gambling Commission’s next steps become clear, operators should take the onus upon themselves to ensure they are operating in the best and most responsible way for their customers.

Matthew Drage is the director of external engagement for Huntswood, leading the development of Huntswood’s external engagement strategy. Drage has a background in conduct regulation and professional services having worked as a supervisor at the Financial Conduct Authority and two ‘Big 4’ advisory firms, where he led and contributed to work in relation to conduct risk. He has a keen interest in how firms are working to improve the complaints journey for customers, becoming more efficient, resilient and driving better outcomes. He is a fellow of the ICA and is a member of the CISI.