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Years of debt. No money to take a holiday. Mental health problems.

These are just some of the issues affecting people who've gambled online using their credit card, risking cash they don't own in the hope of winning more.

But from 14 April 2020, you won't be able to hop onto a gambling website and bet money on your credit card any more.

The UK gambling commission is banning the use of credit cards in online gambling, so anyone wanting to place a bet or play the slots will need to use their own money to do so.

Culture Minister Helen Whately told the BBC: "Whilst millions gamble responsibly, I have also met people whose lives have been turned upside down by gambling addiction.

"There is clear evidence of harm from consumers betting with money they do not have, so it is absolutely right that we act decisively to protect them."

Here's what three people who have all used credit cards to gamble in the past have to say about the ban.

'It'll take me 10 years to pay off my debts'

When Josh, 27, found himself ВЈ600 down after just a few days gambling online using his credit card, he says he did "the worst thing possible."

"I chased the loss, which everyone says not to do, they say stop, don't chase losses, you're always going to be down in the long run," he says.

"But I didn't believe it so I just carried on going. It progressed without me even realising to between ВЈ20,000 and ВЈ25,000, all on credit cards.

"I feel I'm someone that's more intelligent than that, someone that wouldn't do that. I'm not that person. But I was."

Now, Josh is facing the fact that his debts will have a long-term effect on his life.

"I'm looking at eight to 10 years to pay this off," he says.

"No family holidays, no adventure days out, no real enjoyment other than going to work, being at home and taking the kids out when we can afford it - which is shameful."

He believes the new law would have stopped him early on, because he would have run out of his own money to gamble with online.

"I think this will stop people from chasing their losses," he says.

"It would have stopped me because I wouldn't have had any money left in the bank. It might not even have begun, because it was just so easy.

"Now I just sit here ashamed, knowing it's going to take a long time but that's my own fault and I've got deal with it.

'The guilt is overwhelming'

Carl* started gambling online around five years ago with money on his credit card.

"I lost control through online slots and games. I initially took out a ВЈ2,000 gamble on my credit card," he tells Radio 1 Newsbeat.

It didn't work out and Carl lost that money. "I thought I learned my lesson and then about six months later, I thought I could pay off my loans with gambling, so I took the risk again."

He was gambling with five different credit cards, all of which had a big limit on.

"I won a lot, I've lost a lot, but ultimately, you always hit a rock bottom and you always end up losing the lot," he says.

"I ended up maxing out all the credit cards, taking out additional loans that I'm still paying for this day."

And it wasn't just his bank balances and credit rating that felt the impact of his gambling.

"I never thought I'd deal with mental health issues but it's affected me that way," he says.

"It's the overwhelming guilt that hangs over you every single day with that debt upon your head. You've just got to try and get through that and be strong."

"It's hard to actually pinpoint how much I've lost through the years but it's probably ВЈ60,000 plus.

"I've maxed my credit cards out probably three times over, I've consolidated a couple of loans and I think next year, I'm going to have to put all the debts into my mortgage.

"The weight on my shoulders is just too much these days."

'If you haven't got the money, you shouldn't be gambling'

"I've never been a problem gambler but I have used my credit card in the past [to gamble], especially when I know that there's money coming in the following week," says 24-year-old Tom, who didn't expect to get charged by his bank for using his credit card on gambling websites.

"It's like taking cash out on your credit card and you pay additional interest.

"I just think that if you haven't got the money to be gambling, then you shouldn't be gambling at all.

"There needs to be more barriers put in place".

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How slot machines work – and why you should think twice before playing them

Author

Professor of Casino Management, University of Nevada, Las Vegas

Disclosure statement

Anthony Frederick Lucas receives funding from the Sycuan Institute on Tribal Gaming and the University of Nevada, Las Vegas.

Partners

The Conversation UK receives funding from these organisations

The gaming industry is big business in the U.S., contributing an estimated US$240 billion to the economy each year, while generating $38 billion in tax revenues and supporting 17 million jobs.

What people may not realize is that slot machines, video poker machines and other electronic gaming devices make up the bulk of all that economic activity. At casinos in Iowa and South Dakota, for example, such devices have contributed up to 89 percent of annual gaming revenue.

Spinning-reel slots in particular are profit juggernauts for most casinos, outperforming table games like blackjack, video poker machines and other forms of gambling.

What about slot machines makes them such reliable money makers? In part, it has something to do with casinos’ ability to hide their true price from even the savviest of gamblers.

The price of a slot

An important economic theory holds that when the price of something goes up, demand for it tends to fall.

But that depends on price transparency, which exists for most of the day-to-day purchases we make. That is, other than visits to the doctor’s office and possibly the auto mechanic, we know the price of most products and services before we decide to pay for them.

Slots may be even worse than the doctor’s office, in that most of us will never know the true price of our wagers. Which means the law of supply and demand breaks down.

Casino operators usually think of price in terms of what is known as the average or expected house advantage on each bet placed by players. Basically, it’s the long-term edge that is built into the game. For an individual player, his or her limited interaction with the game will result in a “price” that looks a lot different.

For example, consider a game with a 10 percent house advantage – which is fairly typical. This means that over the long run, the game will return 10 percent of all wagers it accepts to the casino that owns it. So if it accepts $1 million in wagers over 2 million spins, it would be expected to pay out $900,000, resulting in a casino gain of $100,000. Thus from the management’s perspective, the “price” it charges is the 10 percent it expects to collect from gamblers over time.

Individual players, however, will likely define price as the cost of the spin. For example, if a player bets $1, spins the reels and receives no payout, that’ll be the price – not 10 cents.

So who is correct? Both, in a way. While the game has certainly collected $1 from the player, management knows that eventually 90 cents of that will be dispensed to other players.

A player could never know this, however, given he will only be playing for an hour or two, during which he may hope a large payout will make up for his many losses and then some. And at this rate of play it could take years of playing a single slot machine for the casino’s long-term advantage to become evident.

Table games like black jack are not nearly as lucrative – to the casino – as slots. Reuters/Toru Hanai

Short-term vs. long-term

This difference in price perspective is rooted in the gap between the short-term view of the players and the long-term view of management. This is one of the lessons I’ve learned in my more than three decades in the gambling industry analyzing the performance of casino games and as a researcher studying them.

Let’s consider George, who just got his paycheck and heads to the casino with $80 to spend over an hour on a Tuesday night. There are basically three outcomes: He loses everything, hits a considerable jackpot and wins big, or makes or loses a little but manages to walk away before the odds turn decidedly against him.

Of course, the first outcome is far more common than the other two – it has to be for the casino to maintain its house advantage. The funds to pay big jackpots come from frequent losers (who get wiped out). Without all these losers, there can be no big winners – which is why so many people play in the first place.

Specifically, the sum of all the individual losses is used to fund the big jackpots. Therefore, to provide enticing jackpots, many players must lose all of their Tuesday night bankroll.

What is less obvious to many is that the long-term experience rarely occurs at the player level. That is, players rarely lose their $80 in a uniform manner (that is, a rate of 10 percent per spin). If this were the typical slot experience, it would be predictably disappointing. But it would make it very easy for a player to identify the price he’s paying.

Slot machines are usually a casino’s biggest source of revenue. Reuters/Andres Martinez Casares

Raising the price

Ultimately, the casino is selling excitement, which is comprised of hope and variance. Even though a slot may have a modest house advantage from management’s perspective, such as 4 percent, it can and often does win all of George’s Tuesday night bankroll in short order.

This is primarily due to the variance in the slot machine’s pay table – which lists all the winning symbol combinations and the number of credits awarded for each one. While the pay table is visible to the player, the probability of producing each winning symbol combination remains hidden. Of course, these probabilities are a critical determinant of the house advantage – that is, the long-term price of the wager.

This rare ability to hide the price of a good or service offers an opportunity for casino management to raise the price without notifying the players – if they can get away with it.

Casino managers are under tremendous pressure to maximize their all-important slot revenue, but they do not want to kill the golden goose by raising the “price” too much. If players are able to detect these concealed price increases simply by playing the games, then they may choose to play at another casino.

This terrifies casino operators, as it is difficult and expensive to recover from perceptions of a high-priced slot product.

Getting away with it

Consequently, many operators resist increasing the house advantages of their slot machines, believing that players can detect these price shocks.

Our new research, however, has found that increases in the casino advantage have produced significant gains in revenue with no signs of detection even by savvy players. In multiple comparisons of two otherwise identical reel games, the high-priced games produced significantly greater revenue for the casino. These findings were confirmed in a second study.

Further analysis revealed no evidence of play migration from the high-priced games, despite the fact their low-priced counterparts were located a mere 3 feet away.

Importantly, these results occurred in spite of the egregious economic disincentive to play the high-priced games. That is, the visible pay tables were identical on both the high- and low-priced games, within each of the two-game pairings. The only difference was the concealed probabilities of each payout.

Armed with this knowledge, management may be more willing to increase prices. And for price-sensitive gamblers, reel slot machines may become something to avoid.

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