CommBank scandal highlights need for gambling reform in Australia
Commonwealth Bank has been accused of exposing customers to illegal offshore online casinos after a customer was able to make $4,000 in credit card payments to Casino Midas, despite Australia’s ban on credit-funded gambling.
Screenshots provided to media outlets showed the transactions were processed through a CBA credit card, highlighting what critics describe as a regulatory loophole.
Credit card payments for online gambling were banned under laws passed in November 2023, aligning online wagering rules with restrictions long applied to poker machine venues.
However, banks can only block transactions when gambling merchants are clearly identified, a process offshore casinos are accused of deliberately obscuring through payment routing and merchant coding practices.
Australians are increasingly turning to illegal offshore gambling sites, with an estimated $4 billion spent annually on unlicensed casinos and bookmakers offering slot-style games, large free bets and cryptocurrency payment options.
As it stands, Australian gambling sites are unable to offer real money casino games to players, new account incentives or crypto payments, putting them at a severe disadvantge compared to unlicensed operators.
Australians can legally bet on sports and buy lotto tickets at locally licensed gambling operators.
Regulation not restrictions the way forward
While land-based poker machine venues now face mandatory overnight shutdowns in several states, online casinos face no equivalent time restrictions, further undermining consumer protections.
Australians have been at the mercy of offshore online casinos for many years, but the situation became worse in 2017, when the government clamped down on gambling sites based overseas, which worked to a certain extent, but opened the door for other illegal operators.
For instance, Australia’s close ties to the UK means all UK Gambling Commission, which is regarded as one of the leading regulators globally, registered online casinos withdrew from this market.
But this opened the door for more dubious regulators, like Curacao e-Gaming and Costa Rica, to benefit from this player pool and to this day they target Australian customers to great effect.
Literally hundreds of offshore online casinos will allow Australians to play, with our laws essentially just stopping the above-board operations from plying their trade here.
As we have seen globally, moving to regulate all forms of online gambling is the only solution to stopping the proliferation of money going to illegal sources, including getting operators to abide by credit card payment laws
With New Zealand set to regulate and license gambling operators this year, surely Australian lawmakers will follow and get the ball rolling on a regulated iGaming industry.
