Two of the nation's peak financial groups are urging the federal government to close a loophole which allows credit cards to be used for online gambling.
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The Australian Banking Association and the Australian Finance Industry Association are pleading for the government to update payment laws to stop allowing credit cards to be used for online gaming services such as SportsBet and Bet365.
Current laws in Australia prevent credit cards being used for gambling in physical venues such as casinos, but do not cover payments made to betting agencies digitally.
Fronting a payments inquiry, ABA chief executive Anna Bligh said legislation needed to address the use of credit for online wagering, especially as it becomes the primary gambling platform.
"In Australia, if you are at a racetrack, in a TAB, or at a casino, we cannot use a credit card to gamble," Ms Bligh said.
"[However], at the same racetrack, or the same TAB, or the same casino and you have your mobile phone with you, there is nothing to stop you from logging into your favourite betting app and placing a bet using your credit card."
Ms Bligh said this anomaly had arisen because online betting was not invented when the laws were introduced two decades ago.
"Australian banks recognise the harm caused by the use of credit for gambling," she said.
"Why are citizens prohibited from doing something in the physical world which they can do with impunity in the virtual world?"
AFIA chief executive Diane Tate echoed the same concern, saying the simplest way to overcome the loophole would be to amend gambling laws, rather than trying to implement an industry code or banning certain merchant codes.
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"The best way to do this is to restrict the gambling providers from receiving credit," Ms Tate said.
"[An] obligation on the gaming provider to restrict the acceptance of any forms of credit or borrowed money is targeted. It's proportionate and scalable and doesn't cause problems or unintended consequences for access for all customers across the payment system."
A number of charities which also fronted the digital payments committee said the loss of credit payments on lotteries would be detrimental to their viability.
Ms Bligh said she was concerned with this view and noted only a bank restricting a merchant code would impact a charity lottery.
"It is only banks, using merchant codes that would affect charities and newsagents," the former Queensland premier said.
"A legislative solution that puts obligations on the gambling operators would have no impact whatsoever on any charity lotteries or newsagents."
Ms Tate also said targeting merchant category codes would be an "imperfect" legislative change and would result in a number of other services being impacted by a ban of credit for gaming.
"Using the merchant category code is going to be imperfect," she said.
"It is going to capture things like charitable lotteries and things for news agents."
A number of banks such as Westpac offer restrictions on payment cards for problem gamblers.
