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The standing committee on social policy and legal affairs has flagged concerns over payday loans being accessed for gambling use.
The House of Representatives standing committee on social policy and legal affairs recently tabled the report of its inquiry into online gambling and its impacts on those experiencing gambling harm.
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Included in the report are 31 recommendations through a public health lens towards online gambling to reduce harm to Australians.
The government aims to develop and implement a comprehensive national strategy on online gambling harm reduction, an online gambling ombudsman, a hard reduction levy on online wagering service providers (WSPs), a public education program, more independent research, and enhanced data collection.
After the Australian government recently announced a ban on the use of credit cards for online gambling to prevent people from “gambling with money they do not have”, the committee was made aware that some gamblers are using payday loans in order to fund their gambling.
The committee has called for assurance of compliance from the payday lending sector with their responsible lending obligations relating to customers who game as per the government’s 2022 reforms.
The committee has made specific elements that should be included in national regulation regarding consumer protections such as the National Consumer Protection Framework for Online Wagering (NCPF) measures and operator-led interventions.
Such consumer protections include prohibiting lines of credit and discouraging the use of small amount credit contracts (SACCs) or payday loans and reducing the customer verification period to 72 hours.
Measure two of the NCPF aims to discourage the use of SACCs (loans of up to $2,000 with a 16-day — 12-month contract term) by online gamblers while prohibiting payday lending from being advertised or marketed on an interactive WSPs or affiliated organisation’s website.
According to Financial Counselling Australia (FCA), this has worked to prevent online WSPs from collaborating with payday lenders, however, it has not prevented gamblers from taking out payday loans.
The FCA reported that a “problem still remains” as “many if not most, of the financial counselling gambling clients have payday loans.”
Chair of the Committee Peta Murphy MP said: “Australians are the biggest losers in the world when it comes to gambling.
“We have a culture where sport and gambling are intrinsically linked. These behaviours are causing increasingly widespread and serious harm to individuals, families, and communities.”
[RELATED: Lenders welcome move to ban credit cards for online gambling]
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