Last week, the UK Gambling Commission announced a ban on the use of credit cards during gambling. The ban which is expected to take effect as from the 14th of April had immediate negative effects on the stocks of some UK gaming venues. The rating on GVC, William Hill, Gamesys and Playtech is also expected to go down following the ban.
In the UK, most gamblers use prepaid credit and debit cards to fund their gambling activities. Consequently, the ban is expected to cause a reduction in revenue for the gaming operators in the UK in the year 2020.
With the new policy expected to take ground soon, it is expected that gamblers who have been using credit cards will start using debit cards or e-wallets. As hinted in a news article shared by Casino.org, this could probably lessen the impact of reduced revenue on the gaming operators, though not as much as it should.
However, the regulators will be faced with another task when it comes to e-wallets, as some of them are funded using credit cards. In recent times, the UK has been trying to tackle the demon of addiction to gambling.
As a result, it has set rolling a number of regulatory rules, with the latest one being the ban on the use of credit cards to fund gambling activities. Well, to some extent limiting credit card funding has bored some fruits but not as was anticipated because gamblers now prefer placing cash for their bets to avoid being traced.
Last year, the UK increased the taxes on gaming activities from 15 percent to 21 percent. In the same year, it also increased the minimum betting amounts in fixed games and online slots, from 2 euros to 100 euros. All this has been done in an effort to fulfill its social responsibility to its citizens.
The ban on the use of credit cards is expected to ensure gaming venues balance between making profits and having responsible customers. According to a report released by Moody’s, the rating agency, out of the 24 million adults in the UK, 10.5 million of them are involved in online gambling. 800,000 of these use credit cards to fund their gambling activities, of which 22% have already been deemed as addicted gamblers.
Those operating online gambling sites are expected to be most affected by the ban. 37 percent of the gamblers bet online as compared to 25 percent who prefer the lottery and 23 percent who prefer to bet physically in gaming venues.
The mentioned gaming facilities are already facing a tough ride. Their ratings are not so good, and with the new policy, they are expected to go even lower. GVC, Playtech and William Hill have been rated as carrying substantial credit risk, though at different levels. GVC and Playtech are rated as Ba2 while William Hill is rated as Ba1. Gamesys, on the other hand, are rated as carrying a high credit risk, B1.