Long-awaited legislation banning the use of credit cards for online wagering could easily be extended to other payment channels that access accounts linked to mortgages and overdrafts, as the Albanese government tries to enlist banks to help it keep the aggressive gambling lobby at bay.

In a move that sent shockwaves through major sports betting and wagering stakeholders on Friday, the government finally bit the bullet on committing to legislation that will stop credit cards from being legally accepted or loaded into mobile betting apps, mirroring their banning at pokie venues.

“It’s as simple as this: people should not be betting with money they do not have,” said minister for communications Michelle Rowland.

“Protecting Australians from gambling harms is a key priority for the Albanese Government. Legislating a ban on the use of credit cards for online gambling will help protect vulnerable Australians and their loved ones.”

But there are serious concerns that limiting bans to highly-specific credit products just won’t capture the huge migration of consumers to other digital channels, like digital wallets and account-to-account transactions that bypass cards entirely but can still be linked to credit facilities.

Mortgages, personal and business lines of credit, overdrafts and cheque accounts can all be linked to some form of credit even though they are not individually approved credit cards issued by a bank or scheme like American Express.

In the main, these appear as debit Mastercard and Visa cards that will not be blocked by Bank Identification Numbers (BINs), even though banks could quite easily make online wagering a default pre-blocked merchant category requiring a specific opt-in and potentially a pre-set spend limit.

It is understood that the shift by consumers to debit products will be a key element of consultations over new legislation banning credit-based transactions, including what limits could be applied to so-called real-time account-to-account transactions that can be used to instantly pay out winnings.

The online and app-based wagering industry ostensibly supports the banning of credit cards on its products, ceding the super-sized loophole as a gesture of political goodwill as the spotlight shifts to its serious overlap with the commercial media industry by virtue of near-saturation advertising.

“Hopefully, these long-overdue changes will be the start of real gambling reform in Australia,” chief executive of the Alliance for Gambling Reform Carol Bennett said.

“This move is critical to protect people from falling into debt and we cannot leave it to industry to self-regulate when they are more interested in their profits than protecting people who are vulnerable to gambling harm.”

Bennett said online gambling using credit has been emerging as a major issue, particularly among young people who are being aggressively targeted by online gambling companies and who and more likely to revert to credit to continue to gamble.

“Evidence shows young men (18-24) are the most prolific online gamblers and online is the fastest growing form of gambling in Australia,” Bennet said.

Realistically, wagering houses actually don’t have that much to lose from credit cards, because merchant fees for gambling are stratospherically high, falling into the so-call ‘risky and frisky’ category because of the higher propensity for disputed or fraudulent transactions.

Online gambling and riskier transactions — the industry term is pills, porn and poker (add pot these days) — have also attracted colourful intermediary processors, the most infamous being the now defunct Australian-run Intabill that tanked owing $100 million in 2009.

The collapse of the payments company resulted in its young Queensland founder, Daniel Tzvetkoff, turning witness for the FBI against a swag of the world’s biggest online poker empires, namely Full Tilt Poker, PokerStars and Absolute Poker on how he legally firewalled their illegal transactions.

Since then banks and the local payments industry have been wary of digitised casinos and turf accountants, even more so after the recent attention of Anti-Money Laundering/Counter-Terrorism Finance authorities that hit Commonwealth Bank and Westpac with billions in fines.

Since those two events, banks — who in the main issue credit cards and front the risk for losses — have donned hazmat suits before letting still lucrative credit cards near the addiction industry.

Banks gave themselves a regulatory victory lap on the news.

“The use of credit cards was prohibited for gambling in hotels, clubs, casinos and TAB outlets by state and territory governments in the early 2000s but can currently still be used for online gambling,” Australian Banking Association and former Queensland Premier Anna Bligh applauded.

“This has led to an absurd reality where someone cannot use a credit card at the betting counter at a TAB outlet or pub but can sit at the same outlet and gamble on a betting app using a credit card.”

Far simpler for punters to pay in cash rather than borrowed funds, as Rowland acknowledged on Sky News on Sunday.

“It’s some 20% of people who are using credit cards for online wagering. Whilst that seems like a small amount, it’s actually that group that is more susceptible to higher losses,” Rowland said.

“People should not be betting with money they don’t have. This is in fact, bringing the online wagering world in line with land-based wagering. We actually can’t use credit for poker machines and casinos, for example.”

Rowland went on to accuse the previous government of dropping the ball on the recommendations from the Regulation of the use of financial services such as credit cards and digital wallets for online gambling in Australia by the Parliamentary Joint Committee on Corporations and Financial Services.

“This was the subject of a review done by the Parliament a couple of years ago, which was not acted on by the previous government,” Rowland said.

“We have picked that up. We’ve consulted with the banking industry, with advocates, consumer groups, with the wagering sector, and we have made a decision that we will legislate this before the end of the year.”

But what hasn’t been picked up is access to other forms of credit. Forget Buy Now, Pay Later (BNPL); it will be regulated almost out of existence within this term of government.

It’s access to overdrafts, mortgage redraws and offsets and lines of credit that are governed by responsible lending obligations, but remain a very grey and muddy regulatory area in terms of responsible wagering that will likely be the next target, unless Rowland is lobbied out of it.

There are real concerns here — not about Rowland’s judgment or integrity — but the fact that the federal government derives revenue from online wagering advertising via government-owned broadcaster SBS.

This arrangement means that the federal government is itself deriving revenue by directly promoting the wagering industry, an arrangement that by its very nature redefines Canberra’s regulatory relationship, especially given the same portfolio that the regulator is also a financial beneficiary.

There are also massive questions as to how and why a government-owned multicultural broadcaster with a mission for the public was allowed to push a new generation of punting addiction onto an audience with an established track record of vulnerability.

This could — and should — change in Tuesday-week’s Budget. Commercial mass media are unlikely to complain if SBS is cut off because it’s one less suitor for dollars they need to contend with.

In the words of Depeche Mode’s Dave Gahn, ‘Enjoy the silence”.

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