Punters will no longer be able to place online bets with their credit card from April 14, the Gambling Commission has announced.
From that date, anyone wanting to place a bet will only be able to do so via a debit card or a cash deposit.
The ban affects all gambling except the National Lottery, and comes two years after charity groups including GambleAware and Citizens Advice urged the government to implement the policy to protect people from sliding into addiction.
Neil McArthur, the Gambling Commission’s chief executive, said in a statement: “Credit card gambling can lead to significant financial harm.
“The ban that we have announced today should minimise the risks of harm to consumers from gambling with money they do not have.
“Research shows that 22 per cent of online gamblers using credit cards are problem gamblers, with even more suffering some form of gambling harm.
“We also know that there are examples of consumers who have accumulated tens of thousands of pounds of debt through gambling because of credit card availability.”
Consultation Prompted Change
A public consultation on the issue was carried out between August and November 2019.
Culture minister, Helen Whately, said: “There is clear evidence of harm from consumers betting with money they do not have, so it is absolutely right that we act decisively to protect them.
“In the past year we have introduced a wave of tougher measures, including cutting the maximum stake on fixed odds betting terminals, bringing in tighter age and identity checks for online gambling and expanding national specialist support through the NHS Long Term Plan.
“We have also secured a series of commitments from five leading gambling operators that will include £100m funding towards treatment for problem gamblers.
“But there is more to do. We will be carrying out a review of the Gambling Act to ensure it is fit for the digital age and we will be launching a new nationwide addiction strategy in 2020.”
It is thought that around 800,000 people use credit cards to gamble, with the regulator's own data showing that more than 165,000 customers made £46million worth of credit card deposits in February last year.
Brigid Simmonds, head of the Betting and Gaming Council which represents the industry, said: “We will implement a ban on credit cards and indeed our members will go further to study and improve the early identification of those at risk.
“The use of credit cards were previously used as a potential marker of harm which might lead to further intervention with customers.”
FOBT Change The First of Many
The announcement is the latest blow to gambling businesses after the Government introduced a crackdown on fixed-odds betting terminals (FOBTs) last year, which saw the maximum stake for bets drastically cut from £100 to £2.
Furthermore, as of March 31, all online operators will be forced to integrate with GAMSTOP, the scheme that enables problem gamblers to easily self-exclude from all the bookmakers they currently have accounts with.
More than 118,000 people have already signed up to GAMSTOP, which enables people to choose the length of time they wish to self-exclude themselves.
These latest industry announcements have had a detrimental effect on share prices, with William Hill shares falling as much as 4.5% in morning trading, while Flutter Entertainment, which owns Paddy Power and Betfair, saw their shares drop 3.54% before recovering to stand 1.2% down.
Shares in 888 Holdings slid 3.54%, while the company also confirming the departure of their chief financial officer, Aviad Kobrine, after more than 15 years with the group.