Australia’s credit card betting ban found to have had limited effect on heavy gamblers

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2025/09/04: Edge Markets: Could a single-use Visa card be the answer to gamblers’ payments woes? 2025/08/01: Massachusetts regulator fines DraftKings US$450,000 for accepting credit card wagers 2025/07/24: PointsBet rejects Betr takeover, raises concerns over VIP-heavy customer base 2025/11/27: Bank of America warns of credit risk associated with prediction markets and sports betting

The Backstory

Why card bans became a policy focus

Lawmakers in Australia framed credit cards as a gateway to borrowing-fueled betting, especially online, where friction is low and limits can be tested at speed. The ban on using credit cards for online wagering took effect nationally in 2024 after years of state-level interventions and mounting evidence of financial harm among high-risk users. The reform arrived amid louder calls to curb gambling advertising and to tighten identity and affordability checks, with advocates pointing to gaps between headline restrictions and real-world spending behavior. The aim: sever easy access to borrowed funds and nudge bettors toward safer limits tied to cash or bank balances.

But the policy collided with how heavy gamblers actually move money. Operators, banks and payment intermediaries had already built redundant rails for deposits and withdrawals. Habitual bettors commonly maintained multiple accounts, and many were accustomed to pivoting among payment types. As a result, the ban was never likely to be a single-switch fix. It is part of a larger arc of policymaking in which governments try to reduce harm while a sophisticated payments ecosystem adapts in real time.

Workarounds and a new class of gambling-only cards

Even as regulators restrict certain instruments, innovators are recoding how gambling payments flow. One example is the dedicated, single-purpose debit model showcased by Edge Markets’ product, which limits a Visa card to gambling transactions and layers on spending controls. The company argues it simplifies compliance and transparency by separating play money from day-to-day finances and creating clean audit trails. The approach is described in detail in an interview with Edge Markets’ founder, who casts the product as a response to fragmented rails, low bank caps and the high-friction experience VIPs face when moving larger sums.

That evolution underscores a central tension for policymakers: measures that target “how” people fund bets, rather than “how much” or “how often,” are easier to implement but also easier to route around. The e61 Institute’s findings that heavy users simply shifted to transaction accounts reflect what operators have long observed, and what providers like Edge are formalizing — segmentation of gambling funds is becoming standard. The question for regulators isn’t just whether a tool is allowed but whether its design channels behavior toward safer outcomes.

Enforcement lessons from Massachusetts

Where rules are explicit, enforcement can bite. Massachusetts banned credit cards for sports betting when it launched in 2023. Regulators later found one operator still processed card-funded wagers and imposed the state’s largest sports betting penalty to date. As our coverage of the DraftKings case details, the Massachusetts Gaming Commission tallied 1,160 impermissible wagers tied to 242 credit card deposits and fined the company $450,000, ordering refunds and a third-party audit. The MGC’s decision and media reports are public, including the commission’s final decision and NBC Boston’s account.

The episode illustrates both the importance and the limits of oversight. A clear ban, a paper trail and prompt action produced a tangible penalty and remediation. Yet even with policing in place, risk migrates. If bettors move from credit cards to debit accounts or e-wallets, the leverage risk tied to borrowing falls, but the frequency and intensity of wagering may not. Enforcement can seal a specific crack without addressing the broader flow of funds into betting ecosystems.

Business models under scrutiny as VIPs drive profits

Payment rules intersect with the industry’s reliance on a small cohort of high-intensity bettors. That dependence has surfaced in corporate dealmaking and due diligence. In Australia, PointsBet flagged “regulatory risks” in a rival’s VIP-heavy economics when it urged shareholders to favor a competing bidder. Our report, PointsBet rejects Betr takeover, cited board concerns that more than half of Betr’s gambling profits in January came from 20 customers, a concentration that can amplify compliance and reputational exposure if those users run into affordability issues or responsible gambling interventions. Related filings and reporting, including PointsBet’s ASX materials and The Guardian’s coverage, capture how investor scrutiny of customer mix and funding sources is converging with policy debates.

This is the backdrop for Australia’s credit card ban: regulators want to cut off easy leverage; companies want to keep VIP friction low; and public markets are pricing the risk that a narrow base of big spenders can destabilize earnings under tighter rules. When heavy gamblers can shift to transaction accounts without missing a beat, the policy signal may be strong while the financial effect is muted.

Lenders brace for downstream credit stress

Banks are recalibrating risk models as betting becomes a mainstream digital habit. In a note highlighted by Bloomberg, analysts at Bank of America warned that rapid-fire wagering and prediction markets could increase delinquency risk, particularly among younger men and lower-income users. Our story, Bank of America warns of credit risk, pointed to research linking legalized online betting to lower average credit scores, higher bankruptcy risk and more accounts in collections. The mechanics matter for policy: banning credit cards may reduce explicit borrowing at the point of deposit, but it does not preclude downstream credit strain if users overextend across other obligations.

For lenders, the rise of gambling-only payment tools could be a double-edged sword. Cleaner transaction labeling may improve underwriting and intervention, but easier, always-on funding could lift volumes. The stakes for financial institutions, then, mirror those for regulators: can the system target harmful intensity without locking out recreational play or pushing activity into less visible channels?

Integrity scandals keep pressure on lawmakers

Financial harm is not the only driver of reform. Match-integrity cases keep the issue in headlines and apply pressure for broader restrictions on advertising and access. A Sydney court recently granted two former A-League players conditional release orders after they admitted misconduct tied to a yellow-card betting scheme. The case, detailed in our coverage, stoked criticism of oversight systems and reinforced calls for stronger guardrails around wagering markets.

That scrutiny folds back into the payments debate. If authorities believe enforcement and integrity controls lag, they are more likely to seek blunt-force remedies, from ad curbs to funding restrictions. The credit card ban sits within that continuum: visible, easy to communicate and administratively straightforward. The e61 Institute’s finding that heavy gamblers adapted with minimal disruption suggests the next phase will hinge on measures that address intensity and affordability directly. Those could include enhanced account-level risk monitoring, stronger identity verification across operators and coordinated limits that follow the user, not the payment method. The question for policymakers is how to design those tools without fueling workarounds that are harder to see and harder to supervise.