Opinion: How is using credit cards to gamble still allowed in Canada?

Rob Csernyik is a contributing columnist for The Globe and Mail and a 2022 Michener-Deacon fellow.

The idea of using a credit card at a casino slot machine or a video lottery terminal is disquieting. Imagine players quickly losing money they technically don’t have, particularly if they’re at-risk or problem gamblers. It’s a line that remains uncrossed in the gambling industry. Yet using credit cards to play online casino games is normal in many jurisdictions.

Australia is trying to change that. As of June 11, Australians can no longer use credit cards at regulated online gambling services. Firms that break the rule may face fines in the hundreds of thousands of dollars. Provincial regulators in Canada should follow Australia’s lead to add extra consumer protection to the rapidly expanding online-gambling ecosystem.

Inviting gamblers to pay using credit cards compounds the financial consequences, including potential difficulties repaying the balance. Banks frequently consider credit-card transactions for online gambling as cash advances, which can mean additional fees, and higher interest rates for cardholders with no grace period. Removing credit-card payments can also cool some of the impulse and instant gratification associated with online gambling, while limiting players from chasing losses by gambling more.

According to University of Lethbridge researchers, between 15 and 50 per cent of gambling revenue comes from problem gamblers, though figures vary depending on which jurisdictions and years are surveyed. One group of Finnish researchers has written that people with the least resources bear most of the burden of the economic cost of gambling. In Canada, where legalized gambling opportunities are largely government owned, that’s perverse. A province can’t separate the roles of running a gambling corporation and ensuring the health and safety of residents. The latter always outweighs the former, and should drive how gambling policies, whether broad or narrow in scope, are shaped.

I’ve spent the past five years researching and reporting on gambling-related topics and have realized how far behind Canadians are in understanding the harms caused by the expansions of casinos, video lottery terminals (VLT) and online gambling over the past few decades. There’s also a lack of concern among the public and politicians that allows for policy gaps between the online and offline gambling worlds.

In Atlantic Canada, for instance, the maximum bet per spin on an Atlantic Lottery Corporation VLT is $2.50. VLT license holders, such as bars and restaurants, are not permitted to assist players by granting credit or helping them make cash advances with credit cards. Meanwhile, ALC online casinos allow credit-card deposits, describing them as “quick and easy” on its website. Players can make up to a $250 maximum bet on one hand of blackjack. Since three hands can be played at once, gamblers can lose $750 in a few card flips. On British Columbia Lottery Corporation’s PlayNow.com, which also accepts credit cards, some online table games have an eye-popping $10,000 maximum bet. There’s no good reason players should be allowed to risk this much online with their credit cards, but it’s become commonplace in Canadian online gambling.

Meanwhile, Australia has enjoyed strong support for ending credit card online gambling payments. A survey commissioned by the Australian Banking Association found 81 per cent of Australians believed credit-card payments for gambling should be banned or restricted. The support even extends to the gambling industry. Responsible Wagering Australia, an industry group representing some of the largest online-gambling companies Down Under, unequivocally supported banning credit-card payments, calling it a “much needed” change.

There’s a good reason why this combination of action and support is happening in Australia. The harms caused by gambling are more openly acknowledged and discussed there, in the media and in government chambers. In 2023, a parliamentary committee inquiry into online gambling harms made 31 recommendations to the Australian government, including the review of payment methods.

Gambling data and intelligence firm H2 Gambling Capital has previously identified Australia as having the highest worldwide gambling losses per adult. The country’s government pegs the damage at about $25-billion Australian dollars annually.

In 2018, the firm identified Canada as having the tenth-highest adult gambling losses in the world – and that was before the onslaught of single sports betting and online casinos.

That’s why Canadians need to take an honest inventory of the negative offshoots that have come with increased legalized gambling opportunities. There is too much public apathy and silence, and too few people in positions of power brave enough to address ways to protect consumers. Banning credit-card payments for online casinos is overdue.