New Zealands Banks Opposed to Online Gambling Credit Ban

Robert Longthorpe - Senior Writer
Robert Longthorpe
27 June 2023 in News
NZ Banks Opposes Online Gambling Credit Ban

Unlike their Australian counterparts, banks in New Zealand appear to be resisting the prohibition of credit card use for gambling at real money online casinos.

In a recent development, Australian banks publicly stated their support for the Australian Capital Territory Government's decision to prevent gamblers from employing credit cards for online gambling transactions. However, the New Zealand divisions of these banks are evidently adopting a divergent stance on the issue. If this is something that interests you, then it’s important to be aware of how different payment methods can affect your play at NZ online casinos.

Australia's Move to Protect Gamblers

In a move reported earlier by Casino Guardian, the Australian Federal Government declared a prohibition on credit card use for online gambling in the country. This decision came in the wake of the results of a parliamentary investigation conducted in 2021. Furthermore, the Australian Banking Association (ABA) had lobbied lawmakers to enforce this ban, arguing that credit cards were inappropriate for gambling-related credit and could potentially harm domestic customers.

This anticipated legislation is set to align online gambling regulations with other gambling forms in Australia, which have not permitted credit card transactions since the early 2000s.

Despite welcoming the move, ABA's CEO, Anna Bligh, remarked that the reform was long overdue. She reasoned that credit cards could lead to severe financial distress for local residents, particularly problematic gamblers, by facilitating rapid debt accumulation.

According to Bligh, the credit card ban would assist individuals struggling with gambling-related issues, enabling them to maintain better financial control.

The Differing Perspective of NZ Banks

Unlike the ABA, the New Zealand Banking Association (NZBA) appears less supportive of a comparable measure. The Association stated that a gambling-related credit card ban might not effectively deter local gamblers from overspending and accruing substantial debt. It also mentioned that NZ banks had found no proof suggesting customers using credit cards for online gambling transactions were more likely to default.

The NZBA believes that a potential ban would only push players towards alternative payment methods like debit cards, Paypal, AliPay, WeChat, and tokens purchases on platforms like Trademe or eBay. Instead, the NZBA proposed that compelling local Internet Service Providers (ISPs) to block specific online gambling providers would be more impactful in addressing gambling-related harm.

The Current Gambling Scene in NZ

New Zealand remains a favourite market for online gambling operators, particularly those located overseas, mainly due to its lack of online casino and gambling legislation. According to consultancy firm Regulus, the country's overall online gambling revenue grew from NZ$139.3 million in 2014 to NZ$332.6 million in 2020 and is projected to reach NZ$600 million by 2025.

DIA's Consideration of Proposed Online Gambling Laws

Since 2019, the Department of Internal Affairs (DIA) has been contemplating the proposed online gambling laws, but progress remains sluggish. Experts predict that the forthcoming elections, alongside a recent ministerial reshuffle, may delay legislative changes.

As disclosed by Newsroom, nearly 75% of the 182 submissions on restricting credit card use for online gambling transactions endorsed the proposal, highlighting the potential risks and costs involved.

Despite differing views, NZBA's CEO, Roger Beaumont, confirmed the group's readiness to participate in any further work on the matter.

Existing Solutions and Challenges

A potential solution already exists - Kiwibank introduced an option to block specific transactions to gambling websites' merchant codes in 2021. This move reportedly resulted in a 75% success rate in maintaining the suspension for over three months in the pilot program.

However, the Bank of New Zealand noted that online gambling providers could evade these blocks by altering their merchant category codes. Furthermore, customers could potentially bypass the suspension by transferring money from their credit cards to other accounts, such as e-wallets.

Analysts believe that the differing positions of the ABA and NZBA could stem from the fact that the ABA's CEO was a cabinet minister in the Queensland State Government when most other forms of gambling had their credit card transactions suspended.

Keeping NZ Gamblers Informed and Safe

We remain committed to bringing you the latest updates on this evolving story. We strive to keep our NZ online casino players abreast of the relevant developments in the industry, ensuring they can continue to enjoy safe and secure online casinos like those recommended on our site.

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