Should Banks Help Fight Gambling Crisis in the USA?

America is in the midst of a mental and behavioral health crisis that is spurred on by the proliferation of online gambling and sports betting. While there is discussion about federal assistance, via the Gambling Addiction Recovery Investment and Treatment Act, the country is currently left to its own devices to curb the problem.

One by one, schools, organizations, state governing bodies, and even a few gambling operators are stepping in to help provide support. Another industry that is in a unique position to do so, are banks. After all, they are the bridge between player finances and gambling deposits. Whether or not this role innately infers responsibility is beside the point. Instead, we suggest that banks have nothing to lose and everything to gain by joining the fight against problem gambling in America. Further, there are a number of online searches specifically for “Can your bank stop you gambling?” and “Can banks help with gambling?” which indicates that Americans are looking towards financial institutions as a means of intervention. Please read ahead for further insight.

The Potential Role of Banks in Helping Mitigate the Damage of the Problem Gambling Crisis in America

Why Banks Should Care

“Do banks care if you gamble?” is a question posed by many Americans. Given that debt from gambling is a crisis on its own, it’s clear that banks take on risk by not providing support systems to their customers and clients. If banks want to protect against defaults on mortgages along with personal and business loans they’d be wise to monitor for and help customers/clients manage problematic gambling behavior. Moreover, given that banks make loans based on the capital provided by customer deposits, ensuring that customer accounts remain healthy keeps their business model healthy. Lastly, anything that the banking industry can do to protect the public from harm is a big plus for their public relations. Let’s be honest – public perception of banks is not great. 56% of American adults have a negative view of our country’s banks, so they could use a boost in the corporate social responsibility (CSR) column.

Let’s reiterate why banks and financial institutions should get more involved in the fight against problem gambling:

  • Protect against defaults on mortgage loans
  • Protect against defaults on personal loans
  • Protect against defaults on business loans
  • Improve public relations
  • Enhance corporate social responsibility (CSR) programs

Tools Banks Can Provide to Help Customers Stop Gambling

“Because of the hidden nature of gambling, where frequently family and friends of an affected problem gambler are not aware, the banks are in a unique position to help, since banks have (some of) the data about gambling spend, income and transactional meta-data for gambling (for example during night-time and speed of expenditure). This puts them in a unique position where they have an opportunity to spot problems and intervene, even if this is limited to communicating with the customer, pointing out spend analysis, offering tools, and signposting an affected person to external support. Banks are also in a better position than gambling operators to judge a customer’s vulnerability, as many gamblers play with multiple operators.”

Queen Mary University of London

The above snippet from a recent report (February 2024) prepared by the Queen Mary University of London sums up the banking industry’s unique position extremely well. While American financial institutions cannot (and should not) overstep, they can certainly empower customers with resources and tools. For instance, a vast majority of banks in the UK offer customers free access to bank gambling blocks (BGB) that are initiated by customers who identify that they have a problem with gambling. These BGBs identify a gambling transaction through a code used by operators (casino and/or sportsbook) to classify the nature of the transaction. If a BGB is in place, the credit card and debit card authorization process will decline a request to authorize payment when attempted by an operator using that code for the transaction. While a customer can remove the BGB, there is generally a minimum cooling-off period that theoretically gives the customer time to reassess their relationship with gambling, and potentially use that time to get help. Of course, the effectiveness of BGBs can be circumvented via other types of methods to fund online gambling, but they are an important piece of the puzzle.

In addition to bank gambling blocks, tools that U.S. financial institutions should offer opt-in customers to hedge against problematic gambling behavior include the following:

  • Options to outright ban connections between accounts and regulated online gambling operators.
  • Options to set gambling spend limits when connections between accounts and online gambling operators are allowed.
  • Communicate with customers when there are uncharacteristically excessive withdrawal amounts made from accounts.
  • Communicate with customers when there are uncharacteristically excessive withdrawal frequencies made from accounts.
  • Communicate with customers when there are uncharacteristically timed withdrawals (late hours of the night, etc.) made on accounts.
  • Issue periodic statements (aka “spend analysis”) on how much customers are spending on gambling activities.
  • Provision of digital tools to block online gambling, such as Gamban.
  • Provision of digital information resources such as problem gambling tests.

*Communications can be done through banking app “real time” push notifications and SMS messaging.

Beyond the provision of automated alerts regarding concerning activity along with account limits and blockers, banks will want to offer affected customers access to support. While support for how to get out of gambling debt is logical for a financial institution, banks should also partner with professional external services that provide treatment for gambling disorder. The Queen Mary University of London report referenced above points to how UK banks have connected with GamCare, a support platform for anyone affected by gambling harms across Great Britain. Customers who opt-in to the BGB program and continue to exhibit problematic gambling behavior are referred to GamCare to get help. Banks and financial institutions in the United States can do the same through Kindbridge Behavioral Health.

Kindbridge Behavioral Health (KBH) provides one-on-one treatment for gambling disorder in addition to group counseling for problem gambling.

In addition to signposting these external support services, U.S. banks are encouraged to work with Kindbridge Research Institute (KRI) to run an analysis on customer profiles to identify potential vulnerabilities which can help formulate customized support programs.

It’s in America’s best interest to have banks and financial institutions become more involved in the fight against problem gambling, even if it’s just in a communicative capacity. If you represent one of these institutions, connect to Kindbridge today to discuss options.

Responsible Banks and Financial Institutions

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