Why Macquarie Bank have banned gambling on credit cards

Why Macquarie Bank have banned gambling on credit cards

  • Macquarie Bank bans credit cards for gambling as part of card overhaul.

  • Blanket ban of card usage at merchants coded as gambling businesses.

  • The bank is trying to make it harder for cardholders to get into problematic card debt.

The house always wins. Now it's Macquarie Bank's turn to try stop you from losing money as card holders will no longer be able to use their Macquarie credit cards for gambling or lottery tickets from July 1st. 

In a blanket move across all Macquarie Bank cards the bank won't let you use their credit cards for nights out at a casino, lottery tickets, sport betting and online gambling. All of these transactions will be blocked in a move designed to prevent "problematic credit card debt". 

We’re being proactive in helping our customers manage their finances effectively and avoid problematic credit card debt.
- Ben Perham, Head of Personal Banking

Any merchants identified as gambling businesses via the merchant code will result in the Macquarie cardholder being automatically declined when they try to pay or do a cash advance. The card will be declined regardless if they actually have a problem with gambling or not.

Gambling machine
The one armed bandit pokey machine

Ben Perham, Head of Personal Banking at Macquarie said that, "The blocking of transactions that are registered under a gambling and lottery merchant code, as well as capping cash advance balances, are just some of the important steps we’re taking to support the financial wellbeing of our customers when they bank with Macquarie."

The problem with gambling

In Australia, as with all countries, there is a hidden cost of vice and waste. Lady luck costs the average Aussie over $1,000 each year in the form of lotto tickets, scratchies, pokies, betting apps, horse races, and sports betting. 

Significant numbers of people get into difficulty with problematic credit card debt – and it is particularly bad when it's due to gambling. Gambling is one of the obvious destructive vices along with smoking, drinking, and drugs that empties money out of people.

Consumer groups and lobbyists have been pushing the government for years to take more control over the gambling industry.

What about other credit cards?

Gambling dice
It's getting a little harder to gamble in Australia.

Many other banks have already "rolled the dice" in moves to ban or restrict personal card use for gambling. American Express, Virgin Money, Citi, Suncorp, Bank of Queensland and NAB have all imposed restrictive spending blocks of some kind or another on cards being used for gambling purchases.

For example, NAB credit cards allow cardholders to activate a setting to block gambling transactions. But they've got to take this step themselves. NAB doesn't do it for them. Whereas Macquarie Bank has made the blanket choice for all of its cardholders.

The ability to control spending to certain categories or limit to specific merchants is the "done thing" for many of the best corporate credit cards. Company managers can issue corporate cards to employees yet closely manage the spending of employees.

But for consumers who are responsible for their own spending, could this be described as a heavy-handed approach that may encroach on consumer freedoms? Possibly it is. However, they still have lots of other options. And with so much personal financial harm being caused by problem gambling perhaps the trade-off with limited curtailing of consumer freedoms on one product type is well worth it. Macquarie felt like it was time to make it harder for problem gamblers to spend on these categories.

How will this impact cardholders?

From July 1, Macquarie Bank cardholders will either have to use credit card from another bank or withdraw cash from their Macquarie credit card then pay in cash to avoid being declined. 

That being said, Macquarie acknowledges the ban might be tricky to enforce where merchants provide gaming products but the primary business is categorised under another non-gambling code such as a newsagent.

For example, if you buy lottery tickets at a newsagent the terminal mightn’t be classified as a gambling merchant and so the transaction won’t be declined.

What do you think of this move by Macquarie Bank? Leave a comment below.