How UK Banking Restrictions on Gambling Transactions Could Impact iGaming Industry
In 2020, the UKGC announced a ban on gambling businesses that allow punters across Great Britain to use credit cards for gambling. The ban was imposed on the 14th of April. 24 million adults in the UK gamble and 10.5 million among them prefer online gambling. The United Kingdom Finance estimated that around 800,0000 punters use credit cards for gambling. Separate research on the matter by the UKGC showed that 22% of online gamblers who prefer credit cards for gambling are classified as problem gamblers who are in need of help. The ban applies to both brick and mortar as well as online casinos with an exception to non-remote lotteries. This was done to add an effective layer of additional protection for gambling addicts, even for gamblers who operate through very credible sites such as thegruelingtruth.com.
What Does Neil McArthur Say About This?
The Gambling Commission chief executive, Mr. Neil McArthur stated that credit card gambling has led to significant harm in the UK and the ban imposed will minimize the risks for the same. He mentioned that UKGC research showed that 22% of online gamblers who use credit cards are problem gamblers since they tend to use money that they do not potentially own. Thus, there have been cases where punters have accumulated massive debts due to the availability of credit cards. He also mentioned how the fees charged by credit card companies are escalating the situation since punters are trying to chase their losses. He also mentioned that for certain punters, credit cards were a convenient option, however, the majority of them fall into the trap and do not know how to use a credit card appropriately. This restriction was brought about to control gambling harms. The latest trends including crypto-enabled mining, investment, and gaming could further add to the problems of anonymous gaming, which would make tracking problem gamblers even more impossible.
Effect On The iGaming Industry
Post the credit card ban in the UK, the share of some of the largest gambling firms in the country saw a decline since the stock market value is influenced by such major news releases. One of the most significant and oldest casinos saw a decline of 3.2% – 3.3% in yearly revenue. The gambling sector in the UK generated a GGY of £14.3 billion during 2018-2019. During 2022-2023, the total for gaming and betting receipts add up to £164 million which is 11% higher than the previous financial year.
The GGY during 2020-2021 was £12.7 billion which was an 11% decrease from 2019-2020 statistics due to the ban on credit card gambling. The total GGY excluding all reported lotteries stood at £8.5 billion during 2020-2021 which was a 16.8% decrease from 2019-2020 statistics. The total number of betting platforms in the UK stood at 8625 during 2020-2021 which was again a 14.8% decrease from the previous financial year. Due to the ban, the total GGY for the remote betting sector stood at £6.9 billion in 2020-2021, which was an increase of 18.4% from 2019-2020 since online gambling brought about new payment options like the cryptocurrencies such as Ethereum, Bitcoins. In terms of brick-and-mortar casinos, there was a massive 62.5% decrease during 2020-2021 since online gambling flourished due to the Covid-19 pandemic.