Australian banks are supporting a their government ban on gamblers using their credit cards to bet online. Their Kiwi subsidiaries are taking quite a different position.
The idea of someone taking out a credit card to hit the pokies online is either A-okay or deeply concerning, depending on whether you’re an Australian bank in Australia or the same bank operating this side of the Tasman.
Last week the Australian Government announced it would ban the use of credit cards for online betting in Australia following a parliamentary enquiry from 2021 and, most recently, pressure from the Australian Banking Association, which believed the product wasn’t suitable for credit and could cause harm for customers.
Albanese’s Labor government will introduce legislation in the next few months, with the move bringing online gambling in line with other forms of betting in Australia, where use of credit cards has been banned since the 2000s.
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In a statement after the ban announcement, Australian Banking Association chief executive Anna Bligh said the reform was overdue.
“Using credit cards for gambling can create a unique harm where large amounts of debt can be accumulated in a short period. For people with a gambling addiction, a credit card can lead to severe financial stress for the individual and their family,” Bligh said.
“The online gambling credit card ban will go a long way to help people experiencing gambling harm to keep control of their finances.”
Despite having many of the same members as its Australian equivalent, the New Zealand Banking Association has been much less supportive of a ban on credit cards.
The association said a block was unlikely to have the intended effect – keeping gamblers from racking up unacceptable debt. Moreover, New Zealand banks had not found evidence that customers who used their credit cards to gamble online were more likely to default.
“If credit cards are blocked, other payment methods – for example, debit cards, Paypal, WeChat, AliPay, through the purchase of ‘tokens’ on eBay or TradeMe, etc – can be used to gamble online,” the association said.
Instead, requiring internet service providers to block certain online gambling providers would have a larger impact, it said.
Unregulated gambling space
New Zealand is aggressively targeted by online gambling sites, mostly from overseas, because it is one of the few developed nations without legislation regulating online casinos. Total online gambling revenue increased from $139.3 million in 2014 to $332.6m in 2020, according to consultancy firm Regulus. It could hit $600m by 2025.
The Department of Internal Affairs has been looking at the gambling governing online gambling since 2019, with a distinct lack of progress. A recent change in ministers – Jan Tinetti has been replaced by Barbara Edmonds – plus the upcoming election are unlikely to speed up any legislative change.
Use of credit cards for online gambling was included in a discussion paper released by the DIA at the beginning of that review in four years ago.
Credit cards appear to be the main way to top up accounts with online gambling providers in New Zealand, including SkyCity’s Malta-based online offering and the state-controlled TAB.
Three-quarters of the 182 submissions on restricting credit card use supported the idea, with one submitter saying the additional costs and risks involved put the gambler on the back foot before they even started to play.
In a statement to Newsroom, New Zealand Banking Association chief executive Roger Beaumont said the group would be willing to engage with government on any further work in the space.
A submission from BNZ said online gambling providers could get around blocks by changing their merchant category codes. At the same time, customers could get around the blocks by advancing money from their credit cards to other accounts.
Why the trans-Tasman split?
One potential explanation for the different stances taken by the two quite similar banking associations might be that Australian Banking Association chief executive Anna Bligh was formerly a cabinet minister in the Queensland state government some 20 years ago when credit cards were banned for most other forms of gambling.
The ability to block online gambling on credit cards in New Zealand does exist – Kiwibank introduced an option to block transactions to the merchant codes of known gambling websites in 2021.
Customers in a pilot programme carried out by Kiwibank had a 75 percent success rate at keeping the block in place for more than three months, the bank says, saving the average customer $10,000 in that time.