Credit card holders warned about online gambling
Online gambling credit card deposits are treated as cash withdrawals
Gambling online is now more straightforward than ever, as punters can simply register their debit or credit card with the bookmaker, make a deposit and be ready to play within minutes. However, many consumers are unaware that the UK's credit card providers treat such transactions as a cash withdrawal and therefore charge 11% higher than the advertised APR in some cases.
Sandra Quinn, director of communications at the UK Cards Association, explained that consumers "should be aware" of this situation. Nevertheless, she also conceded that it is becoming "increasingly difficult" to monitor the exact rate being charged for deposits.
The online gambling sector has increased rapidly over the past decade, with Britons now able to choose from a wide range of sites on which to try their luck. Here, CreditCards.com takes a look at the costs involved in using credit cards to fund this desire.
Evolution of online gambling
Gambling has come a long way since the days when heading down to a smoke-filled bookmaker on the high street armed with a few pounds was the main way to place a bet. Indeed, the majority of companies now have websites with a huge selection of sporting events to get stuck into and a variety of different customised games for punters to enjoy. The rise of poker into the consciousness of the average gambler in recent years has also spawned numerous opportunities for playing against other individuals online for sizeable sums.
The non-UK consideration
The picture is often obscured further by the fact that many gambling websites are based in countries such as Gibraltar, with Ms Quinn noting that the UK Cards Association could be left with "no jurisdiction" in some cases.
"If you're a company accepting card payments, you've got to have a relationship with a bank who allows you to accept card payments and you've got various rules and regulations to meet," she said. "What I don't know is whether actually a number of the operators outside of the UK are being acquired by other non-UK banks, in which case, we would have no influence over them whatsoever."
Hardened punters will also be aware that online gambling is not permitted in a number of US states. As a result, credit card issuers in the country are particularly wary about the possibility of their customers engaging in online gambling, as they are deemed liable for these transactions.
Read the small print
The online gambling industry will probably continue to evolve and increase in popularity, with advanced developments such as betting exchanges becoming more mainstream. However, Britons would be well advised to read the small print of their chosen credit card deal to ensure that they do not get a nasty shock next time they receive a bill detailing a deposit linked to this practice.
Published: 14 June 2010
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