Pay by Phone Gambling Deposits Could Be Stopped In Line With Credit Card Ban

June 16, 2020 •

pay by phoneIn a bid to curb the gambling addiction problem that the United Kingdom has, the Government has introduced various processes. One of the introductions started in the middle of April 2020, when the banning of credit cards for gambling purposes became effective. That ban was announced in January, and with the fact that the virus situation has pushed gambling participation up during lockdown, that ban has been readily welcomed.

The credit card ban applies to both online and offline gambling setups, meaning that it affects land-based and internet-based casinos, sportsbooks, poker rooms, bingo sites and more. Of the 10.5 million people in the UK that participate in gambling, around 800,000 were believed that utilise credit cards for depositing. Since that ban became effective, people have had to find an alternative in order to transfer money into their accounts.

And while some people have opted to use the ‘Pay by Phone’ option, there’s a potential for this to also be banned for using when it comes to gambling. Various charities and gambling addicts have exposed this “loophole” as being a way for gamblers to get around the recent credit card ban.

How Does the Pay By Phone “Loophole” Work?

loopholeIf a gambler decides to use the Pay by Phone option at an online casino, then this is essentially a credit if you’re a contract user who pays your phone bill each month. This is pretty much the same as a credit card, where you utilise the credit on your account and then pay it back at a later time.

However, the credit card ban was brought in due to the fact that people were falling into debt by using this payment method. Essentially, campaigners are now arguing that the idea of paying by phone pretty much goes against the whole idea of banning credit card transactions. After all, a person using a pay by phone option can then proceed forward with paying their phone bill via a credit card.

Of course, there’s also something else to factor in to this argument, as the maximum that players can deposit through their mobile device is £40 per day (and a maximum of £240 each month in total). However, there are some who say that even though this is a limited option, it’s not enough to simply have that in effect. The payment method should be banned outright.

That’s the stance of one gambling addict, who has fought his own addiction for the biggest part of his life. He now has £50,000 of gambling debts to pay off, which are spread out over around six credit cards. And after seeing an advertisement regarding utilising your phone for gambling purposes, he “was just disgusted”.

Now, he along with various politicians and charity organisations have said that the United Kingdom Gambling Commission needs to take urgent action and shut down the “loophole”.

“It’s like there’s no safe place”, he said, before mentioning that it’s like the gambling industry on the whole is “always on your back”. Of course, he also spoke of those people who may never have considered gambling before, who think that paying by phone is just £10 or £20 each day. It’s limited. However, he said that this could actually be “a new, fresh avenue to getting into this life addiction”.

Gambling Addict Is Backed Up by Professionals

credit card on a laptop with lock and chainIt’s not only recovering gambling addicts that are saying the pay-by-phone method is dangerous, though. Even Dr Henrietta Bowden Jones of the Royal College of Psychiatrists (and who is also the director of the National Problem Gambling Clinic), agrees that something needs to be done about this payment method.

Ms Bowden Jones spoke of her concern over what sort of impact this payment method and type of gambling would have on minors, as well as people currently suffering with gambling addiction. She spoke of it being quite the revelation for her; people using their mobile phones for gambling purposes.

“The whole point of banning credit card use for gambling was to ensure consumer safety in relation to avoiding spending more than one could afford…”, she said. However, she mentioned that the pay-by-phone option definitely seems like a loophole that could be exploited by some and cause serious financial harm.

But could this stance on paying by mobile phone really be taken seriously enough by not only the Commission, but the gambling industry itself as well? While the Betting and Gaming Council (which is the representative for about 90% of the country’s betting market) did welcome the credit card ban brought into effect in April, would it do the same for payments by phone? After all, a reduction in the number of payment methods that are available to gamblers may mean a decrease in the number of people choosing to continue with gambling.

That would likely be a bit of a hit for the gambling industry, so it would be a curious factor if the Council also supports a decision that would ban the pay-by-phone method. Of course, additional measures have been introduced for online gambling sites during lockdown, such as checking on players after one hour and ensuring that a large set of rules to ‘know your customer’ are brought into effect. So, platforms have had to severely streamline their operations already. Would a ban on another payment method be so readily welcomed?

PaySafeCard & eWallet Loopholes

eWalletsIt is relatively simple for betting companies to stop accepting credit cards directly to their sites but it is more difficult to control the use of credit cards through payment gateways, such as PayPal, Skrill, Neteller and others.

The UKGC therefore recently issued further guidelines to operators stating they must put procedures in place to ensure funds from credit cards cannot be used indirectly to deposit to a betting site.

One aspect that seems to have been overlooked in these guidelines are PaySafeCards.  These are vouchers that can be purchased in high street shops using cash, debit cards or indeed credit cards.  Customers can then use the 15 digit voucher code to upload that value of money to betting companies that accept the method.

Given PaySafeCard is used as a payment method by users for all sorts of products and services it cannot ban the use of credit cards to purchase them.  The system can be highly anonymous, which is indeed why some people like it, but that in itself makes it almost impossible or a betting site to know how you bought your PaySafeCard voucher.

We should expect that this will be addressed by the UKGC at some point but right now it is still an active loophole.

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