Nikki Bond, Head of Gambling Harms Action Lab, Money and Mental Health

Protecting customers from gambling with borrowed funds

30 January 2025

  • Financial services firms have a key role to play in supporting people to prevent gambling harms – both to people’s financial and also their mental health.
  • Gambling on credit cards was banned by the Gambling Commission almost five years ago, but there remain ways that people can gamble with borrowed funds, such as overdrafts or loans.
  • Yet there are opportunities to close loopholes on other forms of borrowing, including utilising the potential of customer transaction data or open banking to better identify people who might be at risk of harm from gambling.
  • Stay up to date with the work of our Gambling Harms Action Lab to learn more.

Gambling disorder’ is a distinct mental health problem in its own right, but it can also be a cause or consequence of other mental health problems. Gordon Moody, a gambling treatment service, found that 96% of people with gambling problems who enter their service for treatment have at least one other psychiatric condition. Before entering treatment, nearly two-thirds (63%) of men and almost half (48%) of women were experiencing moderate or severe depression. Gambling harms can cause severe distress and devastate relationships, mental and physical health and finances. 

The relationship between gambling harms, financial difficulty and mental health problems is inextricably entwined. The 2023 Gambling Survey for Great Britain found that among people who’d gambled in the past 12 months and had experienced problem gambling, over three-quarters (75.8%) had used savings or borrowed money to gamble. And more than one in six (17.3%) of people at moderate risk of ‘problem gambling’ had also done so. 

Positively, banks can serve as a first line of defence against some of these gambling harms. Current account providers have a privileged view of our spending through transaction data. Banks know how much and how often we gamble, when we’re spending beyond our means and if we’re gambling with an overdraft or loan. Financial services firms are uniquely positioned to monitor and address harmful gambling.

The role of financial services in tackling gambling harms

Over the next two years, the Gambling Harms Action Lab will work with a select group of financial services firms to unpick this knotty challenge, developing innovative support tools and processes to better support people at risk of or experiencing problem gambling. 

So far, we’ve spoken about how, through the Gambling Harms Action Lab, firms could improve existing gambling tools, such as introducing greater friction on Bank Gambling Blocks, introducing opt-in gambling spending insight or limit tools, or using transaction data to identify and proactively support customers at risk of or experiencing problem gambling. However, the potential for what firms could achieve goes well beyond that. Let’s consider two other potential focus areas for financial services tackling gambling harm.

1. Gambling with borrowed money

Given the financial devastation that gambling can cause, it’s surprising that before 2020, people were allowed to gamble on credit cards. The ban, introduced by the Gambling Commission, was informed by a 2019 survey which found that credit cards were disproportionately used as a form of borrowing for gambling, with almost four in ten (38%) of people experiencing problem gambling reporting having used a credit card to fund gambling. While the credit card ban was undoubtedly welcome, a route to gambling with borrowed money remains via authorised and unauthorised overdrafts, which continues to leave people vulnerable to harm.

“When I first started online gambling… I was able to take a loan out online and increase my overdraft. I was unable to meet the minimum payments each month. I fell behind with my energy bills and was left with no hot water for a year.” Expert by experience 

At the time of the ban, the Gambling Commission acknowledged that banning credit card gambling in isolation could have unintended consequences. Consumers could turn to other borrowing forms to fund gambling, such as overdrafts or loans. As such, the Commission urged the financial and gambling sectors to introduce protections against gambling with other borrowed funds.

Since 2020, progress in addressing the harm caused by gambling on other forms of credit has been slow. While there have been considerable shifts in financial services regulation, including in 2021, the Financial Conduct Authority (FCA) introduced Vulnerability Guidance, and in 2023, the Consumer Duty, both of which raised the bar for the standards for consumer protection. The FCA and the Gambling Commission also established a Memorandum of Understanding in early 2024. These combined efforts pave the way for the regulator and financial services to play their part in introducing protections for customers gambling with borrowed funds.

2. The opportunities of Open Banking

Open Banking, a system that allows banks to securely share customer data with authorised third parties with a customer’s consent, also provides innovative and exciting opportunities for financial services to do more to support people at risk of gambling harm. 

Salad Money is a social enterprise that provides one example of this potential. They use Open Banking, instead of traditional credit ratings, to assess affordability for borrowing. In a 2024 analysis of loan applications, Salad Money found that six in ten (61%) loan applicants’ showed gambling activity in the three months before their loan application and one-third (33%) of applicants were declined loans for excessive gambling.

What’s next for the Gambling Harms Action Lab?

The challenges and opportunities highlighted above are two potential issues the Gambling Harms Action Lab and partner firms could explore in our work over the next two years. Next month, we’ll announce which firms have joined Nationwide Building Society as founding members of the Gambling Harms Action Lab and who are passionate about shifting the dial on how they support customers at risk of or experiencing problem gambling. 

If you want to keep up with the work of the Gambling Harms Action Lab, you can check out our webpage here, join our Research Community of people with lived experience of mental health problems here or join our Professional Network here