Gamblers in the UK will be banned from using credit cards from April in a major shake-up by the Gambling Comission.
The ban comes into force on April 14 and follows a review of online gambling by the commission and public consultations in August and November.
It will apply to online and offline gambling, with the exception of some lotteries, and is designed to provide a "significant layer of additional protection" to vulnerable people.
Research from the Commission shows 22 per cent of online gamblers using credit cards - 22,000 people - are classed as problem gamblers, with even more at some risk of harm.
Overall, 24 million adults in Great Britain gamble, with 10.5 million of those gambling online
Gambling Commission chief executive Neil McArthur said: “Credit card gambling can lead to significant financial harm.
"The ban that we have announced today should minimise the risks of harm to consumers from gambling with money they do not have.
“Research shows that 22 per cent of online gamblers using credit cards are problem gamblers, with even more suffering some form of gambling harm.
“We also know that there are examples of consumers who have accumulated tens of thousands of pounds of debt through gambling because of credit card availability.
"There is also evidence that the fees charged by credit cards can exacerbate the situation because the consumer can try to chase losses to a greater extent.”
McArthur said he was aware the ban would inconvenience members of the public, but felit it was worth it to protect those at risk.
“We realise that this change will inconvenience those consumers who use credit cards responsibly but we are satisfied that reducing the risk of harm to other consumers means that action must be taken,” he said.
He also said the new rules would be re-evaluated, once there was evidence of the effect they were having.
“We will evaluate the ban and watch closely for any unintended circumstances for consumers,” McArthur said.
“The ban is part of our ongoing work to reduce gambling harm. We also need to continue the work we have been doing with gambling operators and the finance industry to ensure consumers only gamble with money they can afford to spend.”
Gambling firms saw their shares slide in reaction to the new legislation to ban the use of credit cards for online bets when the markets opened.
Online specialist 888 saw shares slide 3.3 per cent, William Hill shares fell 3.2 per cent, Ladbrokes owner GVC Holdings dropped 2.8 per cent and Paddy Power owner Flutter sank 1.4 per cent in early trading.
Culture Minister Helen Whately said: “Whilst millions gamble responsibly, I have also met people whose lives have been turned upside down by gambling addiction.
“There is clear evidence of harm from consumers betting with money they do not have, so it is absolutely right that we act decisively to protect them."
Adam Bradford, co-founder of the Safer Online Gambling Group, said: "This is excellent news and it will provide an extra layer of support for people who are addicted to gambling.
"It has been a long time in coming and we are glad the Commission have acted decisively on this matter."
The Commission also announced changes to licence conditions today that will force all online gambling operators to participate in the GAMSTOP gambling self-exclusion scheme and offer customers the service from 31 March.
Bradford said: "The additional requirement for all online gambling websites to ensure they are signed up to blocking software GAMSTOP is also a further good move to ensure that those with a gambling problem can get help and support in a consistent way throughout the industry."
It's the latest move to protect people from the impact of problem gambling - following limits to maximum stakes on fixed-odds betting terminals last year.
There have also been moves by a string of banks to allow people to block access to betting sites, preventing people who have a problem from getting easy access to online gambling.
“In the past year we have introduced a wave of tougher measures, including cutting the maximum stake on fixed odds betting terminals, bringing in tighter age and identity checks for online gambling and expanding national specialist support through the NHS Long Term Plan," Whately said.
"We have also secured a series of commitments from five leading gambling operators that will include £100 million funding towards treatment for problem gamblers.
“But there is more to do. We will be carrying out a review of the Gambling Act to ensure it is fit for the digital age and we will be launching a new nationwide addiction strategy in 2020."
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