Labor has announced it will begin to take steps to make it illegal for betting companies to allow people to use credit cards when gambling online.
The government says the decision will bring online gambling into line with other services where credit cards are not allowed.
While there is no firm date for when the ban will come into place just yet, Labor says it plans to introduce legislation to parliament later this year.
It will now consult with industry groups and other stakeholders about draft legislation and how the ban will actually be implemented.
The government's plan is to use the same system rolled out in Australian casinos to prevent credit card withdrawals from ATMs where bank identification numbers (BINs) are used to identify and then block credit card payments.
The ban was one of the recommendations from a 2021 parliamentary committee inquiry that looked at the regulation of credit cards and digital wallets being used for online gambling.
The report acknowledged that while the proportion of people using credit cards for online gambling might be low, the harm caused could be "significant and life changing".
"This committee also notes that the industry peak body for online wagering, Responsible Wagering Australia, now supports a ban and Tabcorp did not oppose a ban on the use of credit for online gambling," it said at the time.
Lottery services will be excluded from the ban, which is also in line with the committee's recommendations, as the government says they present a low risk of gambling harm.
Ban designed to minimise harm
Minister for Communications Michelle Rowland and Minister for Social Services Amanda Rishworth said the move was in line with community expectations given there was widespread support to ban credit cards for online gambling.
They pointed to a 2019 survey commissioned by the Australian Banking Association which found 81 per cent of those surveyed agreed credit cards should be restricted or banned in some way.
Ms Rowland said the decision was in line with the government's priority to protect Australians from problem gambling.
"It's as simple as this: People should not be betting with money they do not have," she said.
"Legislating a ban on the use of credit cards for online gambling will help protect vulnerable Australians and their loved ones."
Ms Rishworth echoed Ms Rowland's sentiment, saying it was an area the government was making sure it took action in.
"We've implemented new taglines, we're introducing BetStop, and now with this latest measure we're taking further action to help Australians who are vulnerable to harmful online wagering," she said.
The ministers also said the government would take further advice on the issue once another current parliamentary inquiry into online gambling had reported back.
Move welcomed by banks, advocates
The Australian Banking Association (ABA) supports the government's plan, with chief executive officer Anna Bligh saying it would establish consistency across the gambling industry.
"The ABA has advocated for a number of years for consistency regarding the use of credit cards for gambling," she said.
"This is a long overdue reform and it's a credit to the relevant ministers that they've taken such a decisive move so early in their term.
"Using credit cards for gambling can create a unique harm where large amounts of debt can be accumulated in a short period."
Financial Counselling Australia (FCA) welcomed the plan but said the exclusion of lotteries from the ban created a loophole.
"We should never have to discuss credit cards and gambling in the same sentence ever again," FCA director of policy Lauren Levin said in a statement.
"If reforms leave a gap, that is where the money inevitably flows. With this in mind, we urge the Government to re-consider the proposed lotteries carve out in the new legislation.
"The principle is the same, 'no one should be betting with money they don't have', whether they are spending $200 on a lottery syndicate or with online gambling, whether they are spending in the local newsagent or on sports betting."
