Breaking the bank
Call for tighter curbs on use of credit cards for gambling
New Zealand’s major banks say they are looking at measures to restrict the use of credit cards to pay for gambling. But budgeting advocates say the banks are behind the eight ball compared to Australia and more needs to done to address the hidden issue which can land people in financial strife.
ANZ Group introduced a cap on how much credit can be drawn down on online gaming platforms in December last year and its New Zealand subsidiary says it has begun talks with the gambling industry here with a view to “eventually” introducing similar measures.
In a report released to ANZ investors last month the bank said its decision to restrict those who had hit 85 per cent of their credit limit from spending on gambling had stopped A$17.39 million ($18.31m) worth of transactions going through in the first three months.
The policy only applies to
online gambling as its Australian customers are already blocked from drawing down on their credit cards at gaming venues.
The report said the bank also planned to introduce a selfexclusion mechanism in which customers could “opt out” of the ability to gamble on their credit cards by the end of 2019.
The controls that banks can place on credit cards to help stop problem gambling was a hot topic at last year’s Australian Royal Commission of Inquiry into misconduct in the financial services sector.
One customer of the Commonwealth Bank of Australia — parent of New Zealand’s ASB — told the commission how he had begged the bank to stop giving him credit card limit increases because it was fuelling his addiction.
In the year to June 30, 2018 gamblers in New Zealand spent $2.38 billion on Lotto, gaming machines, racing and sports betting and casinos — up $49m on the prior year.
Spending on racing and sports betting rose the most jumping 3.6
per cent to $350m, with significant growth in digital channels via the TAB website and mobile app being pointed to as a driver.
In March SkyCity Entertainment Group, New Zealand’s largest casino operator, said it planned to launch an online casino by mid-way through this year.
Asked whether they planned to introduce restrictions on using credit cards to gamble like ANZ in Australia, other major banks said they had plans but did not provide details or timeframes.
A BNZ spokesman said: “[We don’t] have measures like this in place, but we are exploring options . . . along these lines.”
A Westpac spokesman said it recognised the social harm caused by problem gambling and was already investigating a range of possible measures to help those customers at risk.
ASB said it had had rules since 2015 around limit changes on credit cards to help address potential issues arising from gambling and the use of credit.
“We are continuing to develop our monitoring and support for customers where gambling, and other potentially problematic spending behaviours, increase the risk of poor outcomes.”
FinCap chief executive Tim Barnett said Australia had a much bigger focus on gambling-related issues and how the financial sector could step in to help people.
“We are just not seeing this in New Zealand. Banks here are behind the eight-ball. It is a major hidden issue.”
Barnett said gambling using a credit card was reasonably widespread in New Zealand but was hard to quantify because there was no data on it. But he expected it to be growing with the increase in online gambling.
“We would like to see banks doing a lot more.” He said the ANZ credit card restrictions would be a good start but it could be a lot more organised and co-ordinated across the financial sector to prevent harm from gambling.
A spokeswoman