The bill, titled the Interactive Gambling Amendment (Prohibition on Credit Card Use) Bill 2020, was filed in April 2021.
The Environment and Communications Legislation Committee heard evidence submissions from numerous bodies after inviting Australian administrative groups to share their opinions on the bill.
In its submission, the Australian Institute on Family Studies cited the Great Britain’s success in banning credit cards for gambling use in April 2020 as grounds for moving ahead. It said that the need to implement the ban was informed by the Gambling Commission finding that 22% of those that gambled online using credit cards were classed as problem gamblers.
The Institute referred to the GB Gambling Commission again when outlining the effects of credit cards on gambling, stating that the Commission found that 36% of online credit card gamblers gambled when “no other funds were available to them”, such as insufficient account funds.
The Alliance for Gambling Reform acknowledged that although it supports a ban on credit card gambling, the prohibition would not be a “silver bullet”. Governments and financial institutions need to play a role in further action to prevent gambling related harm, it argued.
The Alliance also referred to Great Britain in its response. It pointed out the ease of which those experiencing gambling harm can accrue large amounts of unsecured debt with a credit card, as well as the issue of high interest rates.
The Australian Communications and Media Authority (ACMA) also offered support for the proposed ban, noting it is currently conducting a review on how gambling operations are affected by credit card bans.
To propose a solution, the ACMA cited findings from a consultation paper released in February 2021, where considerations included defining “credit” and examining whether operators allowing a reverse in account withdrawals should be prohibited.
A ban on reverse withdrawals was brought in with the credit card gambling ban in the UK last year.
In its submission, the Australian Government Department of Social Services noted that the potential consequences of customer behaviours would need to be considered for a full ban of credit cards for gambling use.
This meant that legislation had to be designed to ensure it did not create loopholes for customers to circumvent the ban, it said. This was also flagged in a joint submission from Financial Counselling Australia (FCA), the Consumer Action Law Centre and the Financial Rights Legal Centre.
Such loopholes could include the use of payment vouchers to gamble, which the joint submission says has been on the rise in the UK since the ban on using credit cards to gamble there.
It also refers to anticipating ways to evade a credit card ban and assessing responsible loan lending principles.
The submission then called on further “future-proofing” by asking that regulators should have the right to deem certain practices as “illegal online gambling” at their own discretion.
In light of this, the three bodies also called for new forms of gambling to be considered illegal, even if it takes place on a host website in another country. This could include peer-to-peer esports betting and virtual reality online casinos.
The joint submission included reasons for supporting a ban, pointing out the general ease in acquiring a credit card, and how credit card debt can be extremely difficult to get out of.
Researchers at the University of Sydney, including Sally Gainsbury, pointed to the potential use of “alternative customer credit sources” – meaning short-term loans that could damage an individual with a gambling addiction – if credit cards are banned. Along with this, the University argued that efforts to curb online gambling addiction could be damaged if credit cards are removed from the equation, having a potential impact on how operators track those gambling irresponsibly.
The potential issues with short-terms loans was a recurring theme throughout the submissions. The Alliance stated that evidence from the UK outlined that those suffering from gambling related harm were more likely to access “multiple forms of credit”, such as short-term loans. Meanwhile, the Australian Government Department of Social Services cited the use of offshore credit cards and an increase in Australian bettors seeking short-term loans as potential consequences of the ban.
To show how popular credit card use for gambling is, the University also pointed to research from Gainsbury, Procter and Blaszczynski detailing that out of 564 participants in a survey of Australian online wagering companies, 82% had used a debit or credit card to make deposits.
In August, members of Responsible Wagering Australia, which includes popular online operators like bet365 and Entain, agreed to support a prohibition on credit card use for gambling purposes.