Macquarie Bank from Australia is the first major bank in this country to ban gambling and lottery transactions on its credit cards starting from July 1, 2019, according to the Australian Financial Review.
In other words, any gambling-related transaction will be blocked when someone tries to pay with their credit card.
The move comes amid growing regulatory concerns in the country and oversees as Australians are among the biggest problem gamblers in the world. The bank announced that the move is to support the financial wellbeing of Macquarie’s customers, as AussieCasinoHEX.com reports. They hope the changes will help people manage their finances better and avoid difficult credit card debt.
Australia’s Gambling Market
According to the Australian Gambling Statistics, Australians lost almost $25 billion on gambling in the year 2017-2018. Half of this figure consists of only bets on electronic gaming machines.
The regulatory environment in Australia is determined to reduce gambling harm, with problem gambling affecting around 200,000 citizens, according to the Household, Income and Labour Dynamics in Australia survey (Hilda). The government is funding support services and prevention activities for Australians.
Financial Institutions to Minimize Gambling Harm
Even though Australian’s Macquarie is the first large bank in the country to make the move, other financial institutions such as Suncorp Bank, Citibank, Bendigo Bank, Virgin Money, Bank of Queensland, and American Express already ban credit card use for gambling.
Financial institutions play an important role in promoting and supporting reasonable gambling. Even though some larger banks allow the use of credit cards for gambling, they are taking other measures to reduce gambling harm.
For example, Westpac and CommBank allow users to block authorization of gambling transactions on their personal credit cards, including cash advances from ATMs, the International Association of Gaming Regulations reports.
CommBank even offers a Gambling Support Service whose representatives are specially trained to help customers with difficulties controlling their gambling expenditures.
Gambling with Credit – An Issue for Many People in Australia
The Director of Office of Responsible Gambling NSW, Natalie Wright explains for the International Association of Gaming Regulators what responsible gambling is – gambling only with what one can afford to lose.
So, is the Macquarie’s move going to be effective in preventing problem gambling in New South Wales? She explains that they are always advising people not to gamble with borrowed money from friends, family, credit card, or loan. Using credit cards for gambling is a real problem for some people. Therefore, Wright thinks that while what Macquaire did is helpful, it’s only a part of the solution.
She says that this step will prevent people from gambling with credit, stressing out the importance of more strategies available for people based on their individual circumstances. Some of these strategies are imposing cash-withdrawal or transaction limits on bank accounts, and self-exclusion.
Is the Prohibition Going to Be Effective?
Macquarie believes that it’d be really hard to completely ban the use of credit cards for gambling-related transactions. For example, merchants whose primary business is not categorized under a code that’s identified as gambling by the card, and provide gambling services will be difficult to stop from carrying out gambling transactions.
This may happen when lottery tickets are bought from newsagents whose terminals have a different category code than that for gambling merchants.
The bank is aware that they may not always be able to block the authorization of transactions related to a lottery or gambling. So, customers will still be responsible for all charges on their cards.
As Macquarie explains, if you buy a meal or a drink, or do any other non-gambling purchase at a casino using your credit card, it may attract a cash advance fee and interest rate.
Banning the use of credit cards for gambling is a way of giving people a second chance to think, instead of gambling money they don’t have.
The step Macquarie took is part of multiple changes it plans to introduce to its credit card. It will remove the three percent international fee on cash withdrawals overseas, and stop charging international feels on overseas purchases. The standard cash withdrawal fee on credit cards will stay the same.
The Office of Responsible Gambling hopes other banks will also use some of the existing opportunities to prevent and minimize gambling harm, and to offer help to people with gambling problems. For that purpose, they are going to work more closely with banks in the future.