The Gambling Commission is considering banning the use of credit cards in online betting.
The regulator’s report into how to make online gambling safer said consumers “should not gamble with money that they do not have”.
Betting operators have suggested credit cards are used for between 10% and 20% of deposits online.
Before taking action the regulator will explore whether a ban would instead force people to use “payday” loans.
Other proposed changes include improving age verification processes, banning operators from providing “free-to-play” games to children and tackling “unacceptable marketing and advertising”.
The latest suggestions come after a consultation by the Department for Digital, Culture, Media and Sport (DCMS) into online gambling earlier this year. The government’s review also highlighted the use of credit cards as a problem.
The UK’s regulated online gambling industry – the largest in the world – posted profits of £4.7bn in 2017, a 10% increase on the previous year.
The online gambling sector, which does not include the National Lottery or other lotteries, is the single biggest sector in the British gambling market.
The commission said: “We will consider prohibiting or restricting the use of credit cards and the offering of credit but will explore the consequences of doing so.”
While customers can also use overdrafts or short-term loans to gamble with credit, the commission warned concern about using credit cards was “particularly acute”.
The use of credit cards on gambling websites is treated as a cash advance, meaning it is subject to a transaction fee and a high rate of interest.
The report states that it is, therefore, “hard to envisage why consumers would choose to pay in that way, unless it was to gamble with money not otherwise available to them”.
Marc Etches, chief executive of charity GambleAware, said: “With no maximum stakes on internet games, some people may find it difficult to limit their gambling and are at risk of serious harm.
“Being able to use a credit card significantly increases the risk of gambling more than you can afford, so a ban on credit cards online could be hugely beneficial in protecting the vulnerable.”
Deputy leader of the Labour party Tom Watson has also called for “tougher restrictions” to the online gambling market.
He said: “There’s a strong argument that we shouldn’t use debt to finance gambling and therefore we should be thinking seriously about whether people should be able to use credit cards to gamble at all.”
Minister for Sport and Civil Society Tracey Crouch added: “We are committed to ensuring the gambling industry is safe and sustainable.
“These proposals for additional regulations will strengthen the controls already in place and further safeguard children and vulnerable people from the risks of online gambling.”