Credit card use was banned in Australia in 2024, and there’s already been a decrease in online betting spending. This is a clear sign that the key is not more restrictions but the removal of access to credit.
Safer online casino gaming and sports betting have always been a known requirement for gambling providers, but lately, it’s a top priority for regulators and operators. In 2024, Australia took it as far as banning credit cards, and according to a study by the e61 Institute, it has already led to positive behavioural changes.
Australia’s credit card ban came into effect on the 11th of June 2024, and since then, the country has seen a significant reduction in gambling activity.
With this ban, credit cards and credit-linked products like digital wallets and digital currencies for online and telephone wagering were prohibited. The only exemptions are lotteries.
The main goal behind these changes was to simply follow the same restrictions that have already been applied to land-based venues to strengthen consumer protections.
A study led by economists Aditya Maitra and Matthew Maltman from the e61 Institute provides clear evidence that the policy has been greatly successful in what it intended to accomplish. The study uses anonymised bank transaction data to measure behavioural changes following the ban's enforcement.
According to the findings, the average spending fell by A$50 per two-week window for the most affected users. On top of that, the likelihood of placing bets dropped by 15% and about one-third of players stopped betting altogether during the six-week observation period.
According to the study, the decline was driven by the difficulty in updating payment methods rather than the restriction of access to borrowed funds.
The study revealed that bettors still had the opportunity to transfer funds from their credit cards to bank accounts and continue betting at the same cost, but far fewer bettors chose this option.
Many bettors switched to their debit accounts, which suggests the inconvenience of reregistering payment methods serves as a method to discourage casual betting. Cash advance fees are also declining slightly, indicating that players did not choose to pursue workarounds to keep using credit.
Interestingly, bigger gamblers remained largely unaffected as they had enough liquidity to continue betting through transaction accounts. This leads us to believe that friction or barriers can be a powerful regulatory tool that curbs impulsive behaviour or even decreases interest in casual betting entirely.
The study shows that casual players were the ones more likely to stop betting, and with the added friction, the thought of casual betting did not seem as interesting.
Overall, it appears that credit card bettors tend to have higher incomes and liquid savings. So, the use of the credit was not primarily driven by a lack of financial distress.
This challenges the belief that credit card betting is strongly linked to debt problems. Instead, the ban led to a reduction in impulsive gambling due to the slight inconvenience.
Here’s a quick look at policy changes and their implications:
Some of the biggest challenges that remain are that awareness and adoption are limited, and compliance is uneven. The belief is that user-friendly design and stronger communication are needed to improve effectiveness.
The ban has had some success, but there are still a couple of limitations in place, such as the fact that the ban does not in any way affect high rollers. As this is the market most at risk of harm, it needs to be addressed.
While it’s not used as much, there are still alternative borrowing options, like personal loans and cash advances, that players can opt for if they’re desperate. Greater focus is needed on awareness campaigns so more players can make use of the tools available to help them, including BetStop.
Overall, the credit card ban for online betting has demonstrated that the power of friction is able to reduce impulsive gambling behaviour. The e61 Institute’s study gives enough evidence to show that the ban worked as spending numbers dropped, and many stopped betting altogether. But at the same time, it highlighted the fact that heavy gamblers were not affected.
So, while the reform is a significant step toward reducing gambling harm, there’s still a lot of work that needs to be done.
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