Key Points to Keep in Mind
- The majority of prominent credit card issuers either officially ban or unofficially decline transactions linked to gambling.
- When gambling is permitted, many issuers treat these expenditures as cash advances, often leading to steep fees.
- Weighing the risks against the benefits, using a credit card for online gambling is generally a hazardous move.
Gambling is woven into the fabric of American culture, just about as entrenched as apple pie or bootlegging during Prohibition. Recent data shows that over 55% of U.S. adults engaged in some form of gambling within the last year, demonstrating the activity’s widespread appeal.
With the rise of digital platforms, more Americans are placing bets without leaving their couches. Yet, before you punch in your credit card details on that sportsbook, consider this: most credit cards aren’t actually onboard with online gambling payments.
It’s not the gambling websites throwing a wrench in your plans – they almost universally welcome credit cards for payment. The real hesitation comes from credit card issuers themselves, who tend to pull back when it comes to authorizing these transactions. Delving into these five crucial facts will shed light on how issuers perceive gambling charges and what might occur when you try to swipe your credit card for online betting.
1. Credit Card Giants Usually Block Online Gambling Transactions
If you’re hoping to fund online gambling via credit card, the main hurdle lies with the credit card issuer. Big names in the U.S. financial scene, including Wells Fargo and Citibank, explicitly tackle online gambling in their terms—either banning it alongside other “illegal activities” or dictating how such transactions will be handled.
The wording around what counts as “illegal activities” varies by issuer. For instance, Chase has dropped online gambling from its explicit blacklist, yet that doesn’t translate to a green light for these purchases regularly.
Ultimately, issuers wield the authority to approve or decline transactions as they please, with many opting to sidestep the legal gray area by denying online gambling charges outright.
2. Gambling Transactions Often Get Tagged as Cash Advances
Even if your issuer isn’t waving a red flag against online gambling payments, there’s a hidden catch: many treat these charges as cash advances. That means:
“Cash-like transactions will be processed as cash advances. These include—though aren’t limited to—buying lottery tickets, gaming chips, bets at racetracks, and both offline and online wagering.”
Why does this matter? Well, cash advances can be a costly headache for cardholders due to:
- Cash advance fees: These are usually the larger of 5% of the transaction or $10 per charge. The more you wager like this, the pricier it gets compared to standard credit payments.
3. Don’t Count on Racking Up Reward Points
Since most issuers shy away from online gambling charges, it’s nearly impossible to find a card that offers rewards for such transactions. Even top-tier credit cards that accept gambling-related charges typically don’t hand out points, miles, or cash back—instead, they simply process the payment as a cash advance, offering no perks.
4. The Legal Landscape Is Patchy Across States
The legality of online gambling varies widely in the U.S., with the majority of states forbidding it outright. Only a handful permit online casinos, poker, or both:
- Connecticut
- Delaware
- Michigan
- Nevada
- New Jersey
- Pennsylvania
- West Virginia
Note: Some states allow other gambling types, such as sports betting and horse racing, but credit card issuers often handle these the same way—as cautiously as they do casino or poker transactions. This means you might face transaction denials or cash advance categorizations for those bets too.
Additional Fact:
According to recent government statistics, approximately 70% of U.S. states prohibit online gambling in any form, while only about 15% allow full-scale online casinos or poker rooms. The rest maintain varying degrees of restrictive legislation, making this a complex legal patchwork for bettors.
5. Your Credit Score Could Take a Hit
Using a credit card for online gambling doesn’t just wager your funds—it risks your credit standing, especially if you carry a balance. Your credit utilization ratio—the share of credit used relative to your total available credit—is a key factor in your credit score calculation. Keeping this ratio below 30% is a general rule of thumb for maintaining good credit health.
When gambling expenses pile up and you struggle to keep payments current, the odds stack against your credit score. This damage can complicate future borrowing or financing options significantly.
Why Do People Still Opt for Credit Cards?
Despite these pitfalls, many stick to credit cards for online gambling due to their convenience and built-in security features. Credit cards remain among the most trusted payment methods, appreciated for their fraud protection and payment dispute mechanisms. For some players, the ease of use outweighs the potential drawbacks—often seeking assistance from customer service or financial advisors to navigate these choppy waters.