Alna Pushes Aba Not to Ban Lottery on Credit

The Australian Banking Association released a consultation paper late last year, one that was designed to seek public opinions about using credit cards for various types of gambling. That consultation period ended on March 4.

With a decision from the ABA looming, newsagents came out last week in staunch opposition to any move that would ban credit card use for lotto tickets and scratchies.

Bank Decisions Prompted Consultation

There were multiple bank actions that led to the Australian Banking Association’s consideration of banning credit cards for gambling. Various governments considered prohibiting gambling on credit, but it was the decision of individual banks to implement a ban that really caught the ABA’s attention.

Macquerie Bank did it in mid-2019. Any credit cards issued by Macquarie would block all gambling-related charges, which included lottery tickets. Citibank and Suncorp also prohibit gambling codes when using their credit cards.

ANZ (Australia and New Zealand Banking Group) decided in the middle of 2019 to authorize banks to decline any transactions associated with gambling or gaming on a credit card with a balance at or above 85% of their credit limit.

ABA Launched Consultation December 2019

The ABA released its consultation paper to the public in December 2019. At that time, CEO Ana Bligh said that the ABA needed to decide if all banks should play a bigger role in helping to minimize gambling harm in among Australians.

The consultation document asked questions about risks and concerns associated with gambling via credit cards, thoughts on restrictions and prohibition, and which forms of gambling should be considered. In addition, the ABA wanted thoughts on the potential consequences of a ban or restriction, as well as if there should be a transition period to implementing such a change.

The consultation period closed on March 4.

At this point, the ABA is in the process of considering all responses and rendering a decision to its policy. While no banks are required to adopt the policy suggestions of the ABA, many are likely to do so.

Newsagents Fight Back

The day after the ABA closed its consultation period, the Sydney Morning Herald revealed a movement by newsagents to convince the ABA to exempt lottery tickets and scratchies from any potential ban.

Specifically, the Australian Lottery and Newsagents Association claims that lottery options are an “extremely low harm” form of gambling and have been shown to be an “almost negligible risk” for gambling harm by users. And it is much more widely accepted than other types, as approximately eight million Aussies buy a lottery ticket or scratchie each year.

SMH reported that about 40% of lottery tickets are charged to credit cards. Most of those purchases also include other items purchased at newsagents, such as newspapers or food and drink.

This means that a ban on credit card use would not only hurt newsagents – detrimentally so, in some cases – it would hurt all of the charities and social organizations that benefit from lottery revenue. Further, ALNA Chief Executive Ben Kearney said the consideration of a ban or even restrictions is overreaching and illogical.

Kearney said, “Customers who purchase lottery tickets in a retail store are not making multiple large transactions in one sitting; they are enjoying the dream and waiting a few days for the results.”

On the other hand, the ABA would welcome a review of the “unsophisticated merchant codes that apply to newsagents’ lottery transactions.”

NAB Found Happy Medium

The National Australia Bank may have found the happy medium between credit card bans versus customer choices.

Just last month, NAB decided that users of debit and credit cards should be given the choice to block gambling transactions.

Via the bank’s mobile app or website, customers now have the option to disable gambling transactions and block all cash transfers and advances for those accounts. This includes sports betting, casino games, online gaming, and lottery purchases.

This option gives people the option to choose how they want their gambling and purchasing decisions regulated. It may be the middle ground that the ABA could adopt into its policy, and the ALNA could retain its freedom from a ban that could seriously harm many of the businesses it represents.