October 23, 2024

NZ banks have begun blocking credit cards for gambling transactions

Banks in New Zealand online casinos have already begun moving on blocking credit cards for gambling transactions, and this has sparked a huge debate about the online gambling scene. Financial institutions have said that this is a means to address gambling addiction, but is it?

Is this a pragmatic solution to the growing concern of gambling addiction? Can simply restricting access to credit cards truly curb this problem? This hotly debated topic in New Zealand is gaining momentum, with some banks already implementing bans on using credit and debit cards for gambling.

Westpac Bank is the latest to extend a gambling block for debit and credit cards, following similar moves by ANZ and Kiwibank, who’ve had voluntary bans in place.

Some would argue that blocking credit cards appears as a quick fix, as it tackles the symptom rather than the core issue of problem gambling.

But should NZ banks be getting involved in helping block online gambling at all?

Read on for the pros and cons of this new move, and what it might mean for Kiwi punters.

Customers seek help with online gambling addiction

In a recent Radio New Zealand feature, Westpac Bank explained that the new gambling block feature exists because many customers asked for help controlling their gambling habits. Gambling can be addictive and cause real problems for some people. The option is intended to help customers manage their money better by implementing a block on gambling transactions on their cards, and curb impulsive spending.

The rise in online gambling spending

Undoubtedly, credit cards and gambling can be a risky combination. Unlike cash, unchecked use of credit cards allows people to build up large debts quickly, which can be problematic for those struggling with gambling addiction. This financial strain can impact not only the person gambling but also their entire family. Some suggest that a ban on credit cards for online gambling initiated by banks will be a significant step towards helping people avoid gambling harm. The ban also supports good financial literacy and longer-term financial goals.

According to the same RNZ report, Louisa Brock, Westpac’s financial inclusion and vulnerability manager, says a whopping $136.8 million was spent by Westpac customers alone, on online gambling in a recent period. Almost half of that went to TAB and Lotto, with the remaining chunk spent on other online gambling sites.

Is a credit card ban a good idea?

There are some solid arguments against regulating credit card use for online gambling:

Ineffectiveness: Some argue blocking credit cards in this way might not be very effective. Gamers could potentially switch to other payment methods like e-wallets or prepaid cards to continue gambling.
Reduced choice: It restricts consumer choice by limiting their payment options. People who gamble responsibly and exercise self-regulation might be inconvenienced by such a ban.
Inconsistent policy: Some banks might have different approaches and card types, creating confusion and opportunities for customer error.
Impact on businesses: A blanket ban could negatively impact online gambling businesses that operate legally and responsibly.

Perhaps one of the strongest arguments against credit card bans is they keep the focus on payment and not the problem itself. There is potential for a bank-wide ban to push problem gamblers towards riskier alternatives or unregulated avenues for gambling. A more constructive approach might be to address the underlying causes of gambling addiction, providing support systems and tackling the root of the issue. More on this later.

On the pro side:

Reduced risk of debt: Blocking credit or debit cards prevents people from accumulating large debts quickly, which can be a major issue for those struggling with gambling addiction.
Empowering customers: Tools like gambling blocks offered by Westpac and other major banks allow customers more control over their spending.
Flexibility: Options like spending limits or 3-month time restrictions give customers better choices.

NZ Banking Association resists ban while Aussies crackdown

As the issue hots up in NZ, there’s a growing disconnect between Australian-owned banks in NZ and Australia, with Newsroom reporting the New Zealand Banking Association is less supportive of a ban compared to their counterparts across the ditch. Australia has moved more decisively, with the government there banning the use of credit cards for online gambling following a 2021 parliamentary inquiry. The Australian Banking Association also backed its government arguing that credit cards weren’t a suitable payment method for online betting, due to the potential for harm to customers. The Oz ruling brings online gambling in line with other forms of betting, where credit card use hasn’t been allowed since the 2000s.

In Aotearoa, support for a legislated ban like Australia’s has been significantly more lacklustre. A discussion paper by the Department of Internal Affairs commissioned by the previous Labour government received strong public support for banning credit and debit card use for online gambling. However, the New Zealand Banking Association disagreed. They argued at that time that such a ban wouldn’t be effective because gamblers would simply switch to other payment methods like Paypal or WeChat. Additionally, they claimed their data showed no significant increase in credit card defaults linked to online gambling. Westpac figures would suggest otherwise.

Currently, no confirmed legislation on a ban exists. But in light of recent actions taken by the Australians, and a new government here, discussions in New Zealand have been reignited.

NZ Government considers ‘gambling tax’.

New Zealand’s new coalition government has put forward plans to raise money from top New Zealand online casinos with a ‘gambling tax’. This would involve making offshore operators pay a gaming duty, while also aiming to regulate online casino play. But National’s cost projections are in doubt, says Radio New Zealand, with Inland Revenue predicting money raised by closing this loophole will bring in less to the coffers than anticipated. Whether the government and regulatory bodies are supportive of the optional ‘gatekeeping’ move initiated by some banks to block credit cards is also unclear.

Finding a solution

Ideally, a comprehensive approach might be best, where gamers have both options for protection and the freedom to play responsibly.

While banks can offer blockers, regulations like spending limits or stricter verification for online gambling transactions at casinos provide additional safeguards. Government intervention may help ensure consistency across the industry.

It’s important that casinos step up with responsible gaming policies, such as the ones in place at ChristchurchCasino.com. Many online casinos provide player protection tools, including maximum limits on spending, and options to temporarily cool off account access or self-exclude your account for a set period of time – all serve as helpful reminders to gamers. Casinos are also supporters of problem gambling services and provide information for players who may need advice or assistance.

With the maturing online casino scene in New Zealand, the way forward may lie in a balance between protecting vulnerable customers, offering responsible gamblers choice and control, as well as ensuring a well-regulated online gambling environment.

With online casinos growing in popularity, it’s essential for gamers to turn to trusted media for guidance on which online casinos are licensed properly, offer the best deals, and protect their players. Click the link below to explore different online casinos that fit the bill for safe and regulated platforms.