Bank loan risk factor

PNEFOREVER2

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I was speaking to a friend the other day (it genuinely was a friend not myself) who had recently applied for a bank loan as he was looking to get a new car which he stated on his loan application. Anyhow, to cut a long story short, his bank manager said no as he had looked over his account and seen deposits/withdrawals to and from 32Red.

Is this normal? I mean I know the bank has to protect their interests and look for risk factors, but my friend has a decent job, well paid, no debts and doesn't have a gambling problem - in fact he only deposited a few times over a couple of months then quit as "it wasn't his thing".
 

dunover

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It can be usual. Obviously the stigma that comes with gambling has made its way into the reckoning of some financial institutions. They are lending you a sum over say 3 or 5 years, and then they have to hope in that time your gambling doesn't creep up on you and become an issue which would affect repayments. I must admit, knowing what I know, I would possibly flag the gambling transactions too if I was lending cash.

There are other things too - for example making cash withdrawals on credit cards too frequently can be flagged, even though all payments are in order and the person is not in debt - and those cash advances aren't necessarily linked to gambling, but may signify difficulty in the short term finances of the borrower.

Having said that, I've used 3 current account debit cards and 5 credit cards for gaming deposits over the last few years, though not at the same time, and my credit is perfect - if there is a cashback offer for applying for a card from say Quidco or TopCashBack, I apply and always get the card. I never use it and 2 months later get a nice free 20 or 30 quid!
 

irmster

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this is going to become the norm now sadly as some loans and from next year mortgages will be decided on affordability - which means a review of 3 months worth of bank statements and sometimes credit cards to see what sort of lifestyle the applicant is leading.

I have stopped using credit cards for gaming altogether and I am trying to work out the best way to clean up my bank account as even transfers to e-wallets can flag up. Maybe I will open a savings account which has a debit card attached to it just for gaming.
 

PNEFOREVER2

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I have stopped using credit cards for gaming altogether and I am trying to work out the best way to clean up my bank account as even transfers to e-wallets can flag up. Maybe I will open a savings account which has a debit card attached to it just for gaming.

I was just thinking maybe my friend would have been better off depositing by ukash vouchers and withdrawing by paypal.
 

dunover

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This is a very delicate matter - I've always said it will take just ONE disgruntled debtor to take a county court case up against a bank or card company on the grounds of 'non-responsible lending' and get a judgement on the basis the lender knew the debts were due to gambling - if not a judgement then the County Court refer it upwards for a legal definition. Another possibility is a FS Ombudsman ruling.

IF this were to happen, quite literally overnight your credit cards would be barred from certain webwallets or direct casino payments, and likely (if you were running an overdraft) your debit cards would be too. In one fell swoop the casino's UK revenues would be decimated overnight.

I my opinion, the whole thing hangs on a very fine thread.
 

vinylweatherman

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I was just thinking maybe my friend would have been better off depositing by ukash vouchers and withdrawing by paypal.

A Neteller or Skrill account would be better. This is the problem with using a bank account for gambling. Paypal can react badly if the "wrong kind" of transactions are made, whereas Neteller and Skrill are designed specifically for online gamblers. Having to be careful about how you fund these eWallet accounts will also place limits on the amount that can be lost through a session of being "on tilt".

For bank accounts, the best option would be a secondary account with a different bank, one that you don't intend getting a loan from. Keep the main account free of any gambling transactions so that if reviewed, the type of transaction will not count against a loan application. Unless gambling results in unaffordable debt, it should not become an issue with credit checks.

Credit card providers are accepting, but discouraging some gambling transactions to UK based companies, and blocking them altogether for others under "online fraud prevention measures". They are no longer classed as purchases, but as "cash advances", and attract interest from the date they are made, and sometimes the cash advance fee of up to 3% on top.

Putting gambling transactions through a credit card leads to high interest rates, as I found with my main gambling card (Barclaycard) who both gave me a HUGE credit limit, but imposed a store card 29.9% interest rate. They eventually stopped treating the transactions as purchases, and would charge 29.9% from the date of the transaction, which meant I no longer used the card for gambling.

I deposit via my Cahoot account when my Neteller needs a refill, but when it needs emptying, this goes to my main account. This means that they see a steady income, but boosted by some pretty nice "internet based earnings" on occasion. I have not yet been declined for a loan from there;)

Using UKash alone can make it harder for casinos to run KYC checks, and hence a UKash only player may run into problems when making withdrawals, and some casinos INSIST such withdrawals involve their bank, which means the bank gets to find out about the gambling in another way.
 

dunover

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A Neteller or Skrill account would be better. This is the problem with using a bank account for gambling. Paypal can react badly if the "wrong kind" of transactions are made, whereas Neteller and Skrill are designed specifically for online gamblers. Having to be careful about how you fund these eWallet accounts will also place limits on the amount that can be lost through a session of being "on tilt".

Why better? Don't you think the banks/card companies already know what these webwallets are for?

For bank accounts, the best option would be a secondary account with a different bank, one that you don't intend getting a loan from. Keep the main account free of any gambling transactions so that if reviewed, the type of transaction will not count against a loan application. Unless gambling results in unaffordable debt, it should not become an issue with credit checks.

Nonsense. Sorry VWM, but it is. My missus has worked in banking for 18 years, which is why I can answer most banking questions that arise on this forum.;) A credit check with the 3 main credit reference agencies will show ALL accounts up, dormant or live, and if an interest in gambling is a criteria for the lender, they'll find it.


Credit card providers are accepting, but discouraging some gambling transactions to UK based companies, and blocking them altogether for others under "online fraud prevention measures". They are no longer classed as purchases, but as "cash advances", and attract interest from the date they are made, and sometimes the cash advance fee of up to 3% on top.

True, and it's the 'cash advance' label which can be as damning as any identifiable gambling transaction as I explained in my previous post.

Putting gambling transactions through a credit card leads to high interest rates, as I found with my main gambling card (Barclaycard) who both gave me a HUGE credit limit, but imposed a store card 29.9% interest rate. They eventually stopped treating the transactions as purchases, and would charge 29.9% from the date of the transaction, which meant I no longer used the card for gambling.

You got the wrong Barclaycard - I have a 'simplicity' one with a purchases rate of 6.5% permanently and a cash rate of 16.67% permanently - with a large limit. There is a 2.99% fee on gambling processors, and like you said interest from day 1 on them.

I deposit via my Cahoot account when my Neteller needs a refill, but when it needs emptying, this goes to my main account. This means that they see a steady income, but boosted by some pretty nice "internet based earnings" on occasion. I have not yet been declined for a loan from there;)


LOL..you are naïve where banking matters are concerned. Your Neteller w/d's will make NO difference to how your account is viewed; the same effect is achieved simply by transferring money between your bank accounts online to simulate high receipts and spending. I have a HBOS current account not used, but I simply do a few online transfers totalling 1k plus to qualify for a free £5 cash each month. The 'computer' at the bank has no idea whether that's salary, winnings, gifts or a bribe from Al Qaeda - it just pays me.


Using UKash alone can make it harder for casinos to run KYC checks, and hence a UKash only player may run into problems when making withdrawals, and some casinos INSIST such withdrawals involve their bank, which means the bank gets to find out about the gambling in another way. What, you mean like your 'withdrawals from Neteller you mentioned above?:D

Maybe, but not all cards treat gambling as cash transactions and charge a fee. My Natwest ones don't (yet).

It is inevitable that eventually cards will either automatically prevent gambling for the reasons in my last post, or to protect the 'responsible lending' ethos will impose a maximum amount (i.e. 25% of your credit limit) which can be accounted as gambling at any one time. Same as they do now for cash advances - most will only allow 50% of limit.
 

vinylweatherman

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It is inevitable that eventually cards will either automatically prevent gambling for the reasons in my last post, or to protect the 'responsible lending' ethos will impose a maximum amount (i.e. 25% of your credit limit) which can be accounted as gambling at any one time. Same as they do now for cash advances - most will only allow 50% of limit.

How would a lender discover an interest in gambling from a credit check?

It may list all accounts and their current and past status, but it does not list the individual transactions.

To see my interest in gambling a bank would have to get hold of my Cahoot statements, and the only legal way to do this would be to ask me to supply them as part of the application process. If banks can't tell the difference between "moving money around" to get the perks and "gambling transactions", then they can't tell whether this is a customer maximising the return on their money, or one pushing it through gambling sites.

Usually, the request is for "3 months worth of bank statements", so anyone could use a "clean" bank account that supports their primary income and outgoings to supply this history, and thus not reveal any interest in gambling.

So far, banks have not started to restrict incentives to what they can identify as "new money" rather than money moved around the banking system.

The case used here as an example was the bank seeing the descriptor for 32Red itself on a bank statement, and knowing that 32Red was a casino. This level of detail would not show on a credit check, even under the new rules. The only way it could would be if a casino granted a credit account, and this was then listed with credit reference agencies.

All banks can do is "suspect" a reason for money movements, and gambling would be something that might tie in with frequent cash advances, but there are many other things that could lead to frequent cash advances, and not all of them would be "dodgy" or illegal, or be evidence that someone was struggling.
 

dunover

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How would a lender discover an interest in gambling from a credit check?

It may list all accounts and their current and past status, but it does not list the individual transactions.

To see my interest in gambling a bank would have to get hold of my Cahoot statements, and the only legal way to do this would be to ask me to supply them as part of the application process. If banks can't tell the difference between "moving money around" to get the perks and "gambling transactions", then they can't tell whether this is a customer maximising the return on their money, or one pushing it through gambling sites.

Usually, the request is for "3 months worth of bank statements", so anyone could use a "clean" bank account that supports their primary income and outgoings to supply this history, and thus not reveal any interest in gambling.

So far, banks have not started to restrict incentives to what they can identify as "new money" rather than money moved around the banking system.

The case used here as an example was the bank seeing the descriptor for 32Red itself on a bank statement, and knowing that 32Red was a casino. This level of detail would not show on a credit check, even under the new rules. The only way it could would be if a casino granted a credit account, and this was then listed with credit reference agencies.

All banks can do is "suspect" a reason for money movements, and gambling would be something that might tie in with frequent cash advances, but there are many other things that could lead to frequent cash advances, and not all of them would be "dodgy" or illegal, or be evidence that someone was struggling.

Oh come on Vinyl! How do you think?
Many online casinos use basic credit checks on new players, before say the 3k payout limit has been reached whereby they require YOU to provide more verification. Secondly, and you may not like this, some sites will use the search to gauge what sort of budget you have, i.e. the credit you have available reflects your means and income. They can tailor offers accordingly. A substantial amount of casino revenue (the uncomfortable truth I'm afraid but I'm NOT getting into that particular debate) comes from borrowed money and bad debt.
Now, if a lender (and this IS available) sees a gambling company has searched your file, then that is one way exposing things.

Despite you showing bank statements, a landlord/mortgage/loan company can also contact the bank DIRECTLY for bank references and gambling would likely reduce the response to 'we see no reason not to lend Mr.X the funds' which is bankspeak for 'be careful' instead of the one you want which is 'The applicant has always displayed a high level of prudency and always made his committed payments from a credit balance'.
 

vinylweatherman

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Oh come on Vinyl! How do you think?
Many online casinos use basic credit checks on new players, before say the 3k payout limit has been reached whereby they require YOU to provide more verification. Secondly, and you may not like this, some sites will use the search to gauge what sort of budget you have, i.e. the credit you have available reflects your means and income. They can tailor offers accordingly. A substantial amount of casino revenue (the uncomfortable truth I'm afraid but I'm NOT getting into that particular debate) comes from borrowed money and bad debt.
Now, if a lender (and this IS available) sees a gambling company has searched your file, then that is one way exposing things.

So, we have been LIED to over this issue by many operators, who claim that they simply run an ID search, not a "credit check". and that such searches are not visible to other organisations who run proper credit checks for things like loans.

This is bound to create an outcry, unless of course it is BS, and they are all merely "ID checks" as stated.

Such searches WILL show up if we get our credit report, but they would NOT show up to a potential lender. If this is not the case, we have a DPA issue. A full credit check is only supposed to be done when their has been an application for credit. Using a credit check to pry into someone's net worth purely for marketing purposes is not permitted under the DPA.
 

vinylweatherman

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The simple answer is no. With your permission, your credit report can be searched for a wide variety of purposes. These include assessing a credit application, confirming your identity, providing a credit or insurance quote and helping an employer or landlord assess a new tenancy or job application. Importantly, a lender only usually sees footprints created by other organisations when they resulted from credit applications, so other types of search footprint would not be visible. However, the lender would see all of its own search footprints. So, for example, if you applied for a job with a bank and then applied for one of its current accounts, it would see its own employment check. You can learn more about different types of footprints and how they are used in our fact sheet

From Experian UK. The ID searches done by casinos would NOT be visible to a lender, hence they could not find out about an interest in gambling from your credit report.
 

dunover

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So, we have been LIED to over this issue by many operators, who claim that they simply run an ID search, not a "credit check". and that such searches are not visible to other organisations who run proper credit checks for things like loans.

This is bound to create an outcry, unless of course it is BS, and they are all merely "ID checks" as stated.

Such searches WILL show up if we get our credit report, but they would NOT show up to a potential lender. If this is not the case, we have a DPA issue. A full credit check is only supposed to be done when their has been an application for credit. Using a credit check to pry into someone's net worth purely for marketing purposes is not permitted under the DPA.

It's also not permitted to hold incorrect or misleading information, but it's estimated over a third of credit files are inaccurate. The ID searches ARE done via the CRA's. Also, there is a grey are whereby if a player is using a credit card a full search CAN be carried out.
If a less than reputable site ever abused the information, how would we know anyway?
 

Osloking

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Yep heard it before too that some Norwegians got denied house loan from DNB (biggest Norwegian bank) because of gambling related transaction.

They think one day you snap and lose more than you afford since you already have taken big step to actually "donate" money.

best way to do is to buy ukash or paysafecard and deposit it to neteller and withdraw with neteller card. using ukash to casino also work and cash out to neteller after that (that's what i'm doing)
 

vinylweatherman

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Yep heard it before too that some Norwegians got denied house loan from DNB (biggest Norwegian bank) because of gambling related transaction.

They think one day you snap and lose more than you afford since you already have taken big step to actually "donate" money.

best way to do is to buy ukash or paysafecard and deposit it to neteller and withdraw with neteller card. using ukash to casino also work and cash out to neteller after that (that's what i'm doing)

Did they discover how DNB found out?

I have been gambling since 2004, so a statutory credit report now should be stuffed with any entries casinos might have triggered. I last did one in 2004, and at that time this kind of detail did not show.

It will only cost £6, £2 for each of the three agencies involved. That's about 1 spin on IM, or half a spin on a MGS fruitie:D
 

irmster

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Did they discover how DNB found out?

I have been gambling since 2004, so a statutory credit report now should be stuffed with any entries casinos might have triggered. I last did one in 2004, and at that time this kind of detail did not show.

It will only cost £6, £2 for each of the three agencies involved. That's about 1 spin on IM, or half a spin on a MGS fruitie:D

Searches by Casinos are not full credit checks and do not show up to lenders.
 

vinylweatherman

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Its not hard at all, they have a system that flag transaction with code that they don't like, for example gambling is 7995. Since Norwegians cant deposit with visa due to law 3rd party also is flagged like ticket surf or swift voucher.

Were the transactions going through DNB, or were banks sharing this info on customers between each other outside of the credit checking industry?


There is nothing illegal about such transactions in the UK, so banks would have no legal basis for sharing information about customers who gamble. The only thing lenders can see from a credit report is the summary information about an account, not any details of how it is used. They could not use this to single out gambling as opposed to other types of transaction. It's different if the bank you ask for a loan is the one you use an account at to gamble, they can then see the nature of the transactions and use this to determine the credit risk.

An affiliate would also withdraw from Neteller to their bank, but not deposit the other way, and they are "in business", not gambling. At worst, this might persuade the bank that the customer should be told to get a "business account" rather than use their personal account for business purposes.

When I have withdrawn the largest sums from Neteller, it has triggered the bank manager wanting to see me, but it has been about them offering to "help me" by suggesting a few in-house investment products so that they in turn could "help themselves" to a fat commission. I told them I had already decided on what to do with the money, and promptly moved it to another bank:p
 

Osloking

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Were the transactions going through DNB, or were banks sharing this info on customers between each other outside of the credit checking industry?

Most Norwegian bank has everything in one if you want to call it, so your insurance, bank and savings are the same company. but banks do not share information like gambling. They only share if you have not paid your bills and that cause nightmare since you wont get mobile, loan, visa, simply cant be trusted stamp.
 

dunover

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Sorry, I should distinguish between BANK REFERENCES and Credit Reference Agencies. Permission for searches on these is almost always granted when you get accounts in the small print 'you allow us to take up what references we consider necessary' etc.
 

vinylweatherman

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Sorry, I should distinguish between BANK REFERENCES and Credit Reference Agencies. Permission for searches on these is almost always granted when you get accounts in the small print 'you allow us to take up what references we consider necessary' etc.

A "bank reference" is why bank statements for the past 3 months are requested. Unless they are VERY thorough, they are likely to only get references from the primary bank account of the applicant. Getting references for each account that appears on a credit check is going to be costly, and there may be DPA issues about what such references contain. The same DPA issues surround the content of other types of reference, and many referees play safe by giving a "bland" reference unless there is a very obvious issue, such as non payment of loans.

It could be a problem if bank A tells bank B about a customers' gambling habit where said habit is under control and has not lead to any unpaid bills, and bank B then denies the customer a product based on a "bad reference" from bank A that raises concerns over "problem gambling". To keep out of trouble, bank A would not volunteer such information unless bank B asked specifically whether the customer had made gambling transactions. even this could lead to DPA problems on the grounds that more information than was "necessary" was divulged to bank B for the purpose of risk assessing a loan application.

Customers can and do complain to the ICO where they feel they have been disadvantaged by data disclosure that was either inaccurate, gave a false impression, or was not "necessary" for the intended purpose.

Whether or not someone gambles is a private matter between them and their conscience. It only becomes someone else's business where it becomes "problem gambling", affecting the ability of the player to keep up payments and support dependents.
 

Andy Walker

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It can be usual. Obviously the stigma that comes with gambling has made its way into the reckoning of some financial institutions. They are lending you a sum over say 3 or 5 years, and then they have to hope in that time your gambling doesn't creep up on you and become an issue which would affect repayments. I must admit, knowing what I know, I would possibly flag the gambling transactions too if I was lending cash.

There are other things too - for example making cash withdrawals on credit cards too frequently can be flagged, even though all payments are in order and the person is not in debt - and those cash advances aren't necessarily linked to gambling, but may signify difficulty in the short term finances of the borrower.

Having said that, I've used 3 current account debit cards and 5 credit cards for gaming deposits over the last few years, though not at the same time, and my credit is perfect - if there is a cashback offer for applying for a card from say Quidco or TopCashBack, I apply and always get the card. I never use it and 2 months later get a nice free 20 or 30 quid!

Without knowing the legal thinking of this subject and I admit this, the movement of large amounts of money compared to your income whether this be outgoing or incoming would surely flag up a question of money laundering,

I currently have a sock draw full of funds from various lucky streaks in B&M I’d rather not withdraw from my main account and use the money from my ill gotten gains for day to day expenses and sit it out, or just realise that the money is just a loan from the casino and pay them back in full quite sharpish. :)
 

PNEFOREVER2

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Whether or not someone gambles is a private matter between them and their conscience. It only becomes someone else's business where it becomes "problem gambling", affecting the ability of the player to keep up payments and support dependents.

This I agree with, my friend as stated only deposited a couple of times and being the one that introduced him to 32Red, I felt sort of bad he couldn't get his loan.

As for the credit check issue, a relative has also checked his credit record via Experian and he had 32Red pop up on there and is adamant it was a credit check of some sort. Whether he's mis-read it and it was an ID check I don't know.

But 32Red always told myself and my relative in question that we were verified through being on our countries electoral roll, which begs the question why then do an "ID check" on Experian?.
 

AC7X

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A couple of years ago I wanted to extend my overdraft with the bank I'd been with since I was about fourteen. The truth is that I was up to my neck in shit due to gambling losses and I needed a little wiggle room until I could get some cash together. My overdraft at the time was about £1,400 and I wanted to increase it to £1,600.

I was told this would be no problem, but then the bank employee came back looking embarrassed and said that my request had been denied because there was too much gambling activity on my account. I know it's a risk factor and I know I was asking to borrow money, but I didn't realise that gambling was suddenly illegal and punishable by embarrassing banking knockbacks. I don't have, nor have I ever had a bad credit or missed payments for anything, and I was made to feel like some fraudster by a bank I'd been loyally doing business with for ten years.

If they were worried about the security of their money then their minds were put at ease since I paid my overdraft off in full the next month and took my business to another bank. After reading this thread I'm not so keen to use my current account to make deposits any more. Numerous gambling deposits look awful on a statement but if you lift £300 from an ATM and take it straight to ladbrokes your bank is none the wiser. To think that you can glean any real information about a person's reliability by glancing at a monthly statement is stupid.
 

dunover

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A couple of years ago I wanted to extend my overdraft with the bank I'd been with since I was about fourteen. The truth is that I was up to my neck in shit due to gambling losses and I needed a little wiggle room until I could get some cash together. My overdraft at the time was about £1,400 and I wanted to increase it to £1,600.

I was told this would be no problem, but then the bank employee came back looking embarrassed and said that my request had been denied because there was too much gambling activity on my account. I know it's a risk factor and I know I was asking to borrow money, but I didn't realise that gambling was suddenly illegal and punishable by embarrassing banking knockbacks. I don't have, nor have I ever had a bad credit or missed payments for anything, and I was made to feel like some fraudster by a bank I'd been loyally doing business with for ten years.

If they were worried about the security of their money then their minds were put at ease since I paid my overdraft off in full the next month and took my business to another bank. After reading this thread I'm not so keen to use my current account to make deposits any more. Numerous gambling deposits look awful on a statement but if you lift £300 from an ATM and take it straight to ladbrokes your bank is none the wiser. To think that you can glean any real information about a person's reliability by glancing at a monthly statement is stupid.

A bit emotive there if I may say so - the bank never said gambling was 'illegal' and a credit knockback is hardly a punitive matter is it? Rather a considered risk decision.

Well, Landlords, Mortgage companies, loan companies and HP companies to whom this really matters as their money is at risk would say it isn't...as you saw for yourself.
 

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Like I said once before, I cannot quantify this with a precise percentage, but it is clear that many people have bad debts due to gambling and are going bankrupt through it. There is a rise in bad debt that cannot simply (being based on previous economic slumps) be explained on recession. We all know despite most of us here being controlled players that many 'regulars' we see in bookies and amusement arcades are either broke, in serious debt or both. It is a fair opinion to suggest that online gambling sites are no different.

We all know the mathematics. If a player has a spare income of 100 pounds a month, then at 95% RTP he could on average have 2000 spins at 1 unit per month and lose without being affected. Entertainment. If overnight every 'addicted' player stopped gambling I'd suggest the sites would take a very bad hit.

One day someone will (using the Freedom of Information Act) request stats from the big banks like HBOS that are now owned by us the taxpayer and as such not private entities. They will ask what proportion of bad debtors/bankrupts have multiple gaming transactions on their accounts and how much this amount is. I'd wager happily that the amount would be a shock to many.
 
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