Sports gambling has taken the United States by storm, but cracks are appearing in the foundation. While bettors chase their wins and operators strive to turn profits, the system’s reliance on credit cards has raised red flags. Could banning credit card funding be the most straightforward step toward a healthier gambling ecosystem?
The Unchecked Growth of Credit-Funded Bets
For many sports bettors, a credit card is the gateway to placing wagers. In the U.S., around a quarter of sports gamblers reportedly prefer to fund their accounts this way. Yet, this convenience masks a troubling reality: bettors are gambling with money they don’t have.
In most of the 38 states with legal sports betting, depositing via credit card is perfectly legal. But a handful of states—and even the United Kingdom—have taken steps to block the practice, citing the risks it poses to financial and mental well-being.
The problem isn’t just the debt bettors can rack up; it’s also the hidden fees. Credit card deposits are frequently treated as cash advances, which carry hefty fees and higher interest rates. According to a recent report from the Consumer Financial Protection Bureau (CFPB), unsuspecting bettors often find themselves hit with surprising charges.
A Closer Look at the Fees
The CFPB highlighted how these fees can blindside even seasoned bettors. Here’s an example: if you deposit £20 into a betting account using a credit card, you could face a £10 cash advance fee—the same as if you withdrew £200 from an ATM.
Bettors have voiced their frustration:
- “There was no warning about these fees when I entered my payment info.”
- “I’ve used my card hundreds of times before without issues. This felt sneaky and unfair.”
The surge in cash advance fees in states like Kansas, Missouri, and Ohio coincided with the launch of legal sports betting, further illustrating how this practice is bleeding bettors dry.
The Broader Impact on Betting Safety
When sports betting was legalized, proponents touted its safety compared to underground gambling. Legal markets promised transparency, fairness, and protection from predatory practices. Yet, credit card betting undermines these very claims.
Here’s why:
- Debt Dependency: Unlike cash or bank transfers, credit card deposits allow bettors to spend money they don’t have, increasing the risk of spiraling debt.
- Erosion of Trust: Hidden fees and fine-print traps leave many bettors feeling duped, damaging the industry’s credibility.
- Financial Risks: Credit card debt can lead to broader financial instability, from unpaid medical bills to housing insecurity.
Lessons from Other Industries
The stock market, another high-risk financial arena, offers a stark contrast. Most brokerages don’t allow credit card deposits for investments, even those in relatively stable assets like index funds. If traders must jump through hoops to borrow money for investments, why should betting apps make it so easy to gamble on a nine-leg football parlay?
It’s a question of responsibility. Financial institutions and policymakers have long recognised the dangers of unregulated credit access. Yet, sports betting—an industry already teetering on the edge of profitability and consumer trust—lags behind.
What Needs to Change?
So, what can be done to make sports betting safer and fairer for everyone involved? The solution isn’t complex: eliminate credit card deposits.
- Banning Credit Card Use: As seen in the UK, banning credit cards for betting reduces impulsive and debt-fueled gambling.
- Promoting Transparent Payments: Encouraging bettors to use direct bank transfers or e-wallets ensures they are spending within their means.
- Consumer Education: Clear, upfront information about fees and risks can help bettors make informed decisions.
A single policy change—removing credit cards from the equation—could make a world of difference. It’s not about nanny-state interference or moral policing; it’s about aligning the industry with basic financial safeguards.
The Cost of Doing Nothing
If the U.S. gambling industry ignores these warning signs, it risks alienating its customer base and inviting harsher regulations down the line. Bettors already face long odds, and adding unnecessary financial burdens only deepens the divide between promise and reality.
Ultimately, sports gambling should be about fun and entertainment, not hidden fees and crushing debt. And while no policy can make betting risk-free, banning credit cards is a step that even the industry’s staunchest defenders should get behind.
