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UK
Casino Times
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News
16 March 2006
Credit Card Gamblers Lose
Again
Gamblers
will be forced to pay higher credit card charges after
Britain's biggest banks introduce new rules to penalise the
growing number of gaming enthusiasts in this country.
The Royal Bank of Scotland
(RBS), which has 11 million credit card customers, and Egg,
which has more than 3 million cardholders, have made crucial
changes to the way that they define "gambling
transactions".
The revisions mean that
anyone using their credit card to gamble on the internet at
online
casinos and
sportsbooks will be charged a higher interest rate and, in
some cases, a fee.
Citibank, the US banking
giant, already bars its one million customers in Britain
from gambling with its credit cards.
Last year £53 billion
was spent on gambling, including the National Lottery, and
one million people regularly gamble online. There are an
estimated 1,700 gambling internet sites.
A spokeswoman for Mint,
part of the RBS group, said: "The step that has been taken
by RBS is part of a move taking place across the credit card
industry to examine the type of transactions people are
making on their accounts. The gambling transactions are to
be treated as 'advances', as this is felt to be a more
accurate means of reflecting that a gambling transaction is
effectively a cash equivalent exchange."
At present, many credit
card companies regard gambling transactions as "purchases".
In that way, customers pay a lower interest rate and no fees
are levied. Cash advances, such as the withdrawal of money
at a cash dispenser using a credit card, attract higher
interest rates and a handling fee, typically 2 to 3 per
cent.
Under the changes
announced by RBS, to be implemented from May 1, customers
gambling with their Mint card will be charged 17.9 per cent,
up from 14.9 per cent. Interest on drinks and food bought in
a casino will also incur the advance rate.
Egg customers who gamble
with their credit card will be charged a 2.5 per cent fee
and a cash advance rate of 20.9 per cent, up from 15.9 per
cent. The changes take place on April 1. MBNA, which has 7
million customers, already levies a 2 per cent fee and 21.9
per cent interest on gambling transactions.
A spokesman for Egg, part
of Prudential, said: "The recent explosive growth of online
gambling and gambling in casinos has meant that consumers
now demand different ways of funding this type of leisure
activity. As such, many credit card providers now allow
consumers to use their cards to advance them cash for
gambling, typically in the form of chips or 'virtual' chips.
Our decision to levy a fee on such transactions is simply
bringing gambling into line with traditional forms of cash
advances, such as obtaining money from an ATM machine, or
the purchase of foreign currency, travellers' cheques or
postal orders."
Industry insiders expect
higher charges for gambling transactions to be common
practice by the end of the year.
Geoffrey Godbold, chief
executive of GamCare,
the treatment agency for gambling addiction, said: "While
GamCare cannot be sure what impact will be seen through
banks introducing charges for customers using credit cards
to pay for gambling, we hope it will help people who may be
at risk of compulsive gambling to think twice about making
excessive transactions and in doing so help them to stay in
control."
Many online gamblers
prefer to use a non-card method of depositing.
Web
wallets such as
NETeller have become increasingly popular as a method of
gambling online. Recently, Ladbrokes
Online Casino
introduced the ability to deposit using PayPal.
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