A new report by the Australian Banking Association (ABA) shows it’s time to immediately ban the use of credit cards for gambling.
This is a Financial Counselling Australia Media Release
The ABA has released the results of its consultation process about the use of credit cards for gambling. A survey conducted to inform the report found that 81% of Australians believed that gambling on credit cards should be restricted or banned. Only 7% of Australians thought there should be no restrictions on gambling with a credit card.
In the light of these very clear findings, and the harm caused by credit-card gambling, Financial Counselling Australia (FCA) calls on all banks to commit to a ban on the use of credit cards for gambling transactions. If the banking industry fails to act, the Federal Government will need to step in and regulate instead.
“The community have spoken. It no longer meets community expectations for banks to finance gambling debt and set their customers up to fail,” said Lauren Levin, FCA’s Director of Policy and Campaigns.
“Gambling on credit cards is a double whammy. First, you lose your money gambling. Then, you pay credit card interest rates often over 20%. It is a no-brainer that this is harming Australians.”
Mid-tier financial institutions, including Latitude, Bank Australia and Macquarie, have stepped up and do not allow their credit cards to be used for gambling. However, so far, the Big Four have failed to act.
“We have to call this out. Failure to act on known harm means these banks are turning a blind eye to the harm that debt financed gambling is creating for their own customers,” Ms Levin said.
Predictably, some in the gambling industry argued that this lucrative revenue source should be maintained. In a Orwellian twist on public policy, this was couched because of the benefits to Government tax revenue.
“The money has to come from somewhere and we know that it comes at the expense of Australians being able to afford to pay for their living expenses, including food or medications” said Ms Levin.
“It can never be good policy for gambling to be debt financed.”
“There are so many other ways to pay for gambling. Each online wagering company has about 10 payment choices, including debit cards. Stopping credit card gambling won’t break the industry, but it will help a lot of people avoid debt issues.”
As the report notes, in the UK when the banks failed to act, the government stepped into the breach and within a few months all credit card betting was banned.
FCA is the peak body for the financial counselling profession. Financial counsellors offer free, independent and confidential assistance to people who are in financial stress or struggling with debt. They are not planners or advisors. They don’t provide investment advice nor are they lenders.
FCA’s submission to the ABA consultation is available here.
For comment, contact Lauren Levin on 0411 050 035.