-
Casinos for you
Swedish Finance Ministry Calling on Govt to Ban All Credit Card Gambling Transactions
By Jeff Osienya Jul 13, 2023 IndustryThe Ministry of Finance in Sweden is ramping up its efforts to put an end to the use of credit cards in all sorts of gambling transactions. Here’s a deeper dive into why this is vital for the health of the country’s gambling sector.In a heavy-hitting 650-page report, the Swedish Finance Ministry is calling on its government to ban all credit card transactions across all gambling activities in the Scandinavian country. The report, titled ‘Enhanced Consumer protections against risky lending and Over-indebtedness,’ highlights the existing credit arrangements and protections for consumers in the market since 2021. It read in part:
Quote“Today, debts at the Swedish Enforcement Authority amount to 101 million kronor ($9.2 billion), while debts at collection agencies amount to just over 102 billion kronor. These are historically high figures.”
Loopholes Within the Existing Laws
As things stand, the Swedish Gaming Act from 2018 prohibits the usage of credit cards in most gambling areas. That said, the Finance Ministry has found that some licensed operators have formulated loopholes to maneuver through this law. These licensed companies usually offer credit services through third-party agencies.
As such, there have been prior calls to amend the law by key industry stakeholders in Sweden, with the country’s watchdog, the Swedish Gaming Inspectorate, at the campaign’s forefront. The watchdog argues that the law, as presently constituted, works against the market principles for ‘licensees to contribute or encourage players to take loans to maintain their gambling spend.’
There is also the issue that the law, as it is presently, does not cover all the areas that need coverage, like lottery and soft game operators. These are wildly popular verticals of the gambling sector anywhere in the world, and it would be foolhardy to continue pretending the law is effective without considering those two pertinent sectors.
The Rationale Behind the Proposed Ban on All Credit Card Gambling Transactions
The reasoning behind the proposed ban by the Swedish Finance Ministry may be attributed to several factors. First and foremost, it may be a way to prevent problem gambling. With credit cards, individuals can easily access funds that may not be meant for gambling purposes.
With such easy access to a means to continue fueling their gambling flames, using credit cards in gambling could quite easily lead to engaging excessively in the activity. So, should the blanket prohibition of credit cards in gambling be okayed, an extra barrier shall exist that will deter individuals from impulsive and uncontrolled gambling behaviors. It also removes the possibility of accumulating needless credit card debts just because of one’s problematic gambling.
This measure will also shield vulnerable individuals in society who may have easy access to credit cards. These include minors, people battling mental health issues, and people struggling with gambling addiction, among many other vulnerabilities. Restricting gambling using credit cards will also prevent these at-risk demographics from incurring debts they can’t sustain.
It must also be noted that credit cards come with relatively higher interest rates. As such, if individuals start using them to gamble recklessly, they may find themselves in a lot of financial trouble. The implications of accumulating such debts over a long period may be severe and potentially life-altering. So, with the ban in place, such detrimental economic effects may be avoided.
There’s also the aspect of money laundering in the gambling sector. Credit cards provide an easy avenue for thousands of criminals to launder their money in the guise of gambling. The ban on credit card transactions means it would be even more challenging for criminals to use gambling as a cover-up for their criminal activities.
If the ban on using credit cards for all gambling-related transactions is rubberstamped, the wider gambling sector and the Swedish government will likely encourage the usage of alternative means of payment. For sure, payment methods such as debit cards and e-wallets are a welcome change to credit cards, as they are healthier alternatives. They reduce the risk of players wagering with funds they do not have and accruing interest on them simultaneously. Additionally, these other payment options have stricter guidelines of acquisition that prevent underage use and money laundering.
An Ongoing Conversation in Sweden
The conversation about banning all credit card use across the Swedish gambling scene is an ongoing tussle that’s been looked at in plenty of detail. Some notable Swedish industry bodies who have thrown their weight behind the crusade include Svenska Spel, the state-owned gambling ombudsman, and gambling trade associations such as BOS and SPER. However, for the proposal to become law, it must be subjected to a vote, and only after securing majority support will it be legally binding.
Additionally, the European country is taking a sterner stance against illegal gambling. Besides the proposal to ban credit card payments in gambling, the government is also cooking up a new set of rules to combat match-fixing. Should things go according to plan, the new set of rules could be signed into law at the end of this month.
You might also like