Six Reasons Bettors Are Starting to Ditch Credit Cards

Maine, Virginia, and Colorado are among the latest states confronting credit card gambling risks head-on by cutting borrowed money from their regulated betting systems. The moves add momentum behind a growing push for tighter betting safeguards nationwide. 

Speaking about the measure, Colorado Gov. Jared Polis said his concern was the debt burden. “My focus is on saving Coloradans money, not exposing them to loans from casinos that could be their financial ruin.”

Several US states are drawing a line on credit card gambling

A recent study published by the Federal Reserve Bank of New York found that legalizing mobile sports betting contributed to more borrowers falling behind on their debts. Across the population, serious delinquency — at least one account 90 days overdue — rose about 0.3 percentage points. In other words, the count rose from 107 in every 1,000 to 110. By year three, the difference had grown past five people per 1,000. And because only about 3% of adults newly took up betting, researchers said the implied effect among that group was far larger.

One thing worth noting is that the New York Fed analysis tracked credit outcomes across entire populations, not individual bettors, so we can’t say every additional delinquency was directly attributable to gambling. Researchers, however, found more borrowers falling behind after legalization than their model projected would have otherwise. Nonetheless, the underlying concern remains. For anyone who can still gamble on credit, what changes when losing also means owing? 

Here are seven of the biggest risks I see with credit card gambling.

1. Gambling with money you don’t have

Before I get anywhere near the interest, there’s the question of whose money is being put at risk. A credit limit is borrowed money. Having $10,000 available on a card doesn’t mean you’ve got $10,000 to blow on entertainment, especially if your whole paycheck is already spoken for by rent, groceries, and the rest of the basics. 

In a 2024 NatCen evaluation of Britain’s credit-card gambling ban, some interviewees said switching to debit made them pay much closer attention to what they were spending. With credit, especially when the limit was high, it had been easier to keep going.

2. Higher fees and immediate interest charges

Gambling transactions often get treated as cash advances, a practice the Consumer Financial Protection Bureau found at each of the seven issuers it reviewed in 2024 — Chase, Discover, American Express, Citi, Capital One, Bank of America, and Wells Fargo. 

I went through the Chase sample agreement and found that cash advances incur a $10 or 5% fee, whichever is greater, while interest starts adding up from day one (regular purchases avoid extra charges if you pay the balance in full by the due date). The cash-advance rate is 28.49% APR. Therefore, a $200 credit-card gambling deposit would cost you $10 upfront, then roughly another $4.70 in interest over 30 days. 

3. Chasing losses with borrowed money

Once you owe money, even a little, chances are you’ll lose sight of responsible gambling and go over budget trying to win it back. A 2017 qualitative study had participants describing a big win as a way out of financial trouble. Debts and bills were among the main reasons they kept going. The National Council on Problem Gambling says going back after losses is one sign things may be getting out of hand. The problem with credit is that hitting your budget should mean you’re done, but an open balance makes it look like there’s still money left.

4. Debt that follows into relationships

The same 2024 NatCen evaluation I mentioned above also heard from people affected by someone else’s credit card gambling. Many talked about secrecy and damaged trust, partly because the spending never showed up in the checking account where others in the household could see it. Another thing that came up was how draining it felt having money on their minds all the time. Paychecks were going toward gambling debt instead of savings, even after the spending itself had eased.

5. Damage to your credit score

Fair Isaac Corporation, the company behind the FICO Score, says gambling is “no different from any other type of credit card spending” when it comes to your score. The risks, however, are indirect, starting with bets leaving you with a much higher card balance, which factors into “amounts owed.” Falling behind on payments after losses pile up can do more damage, since your track record of paying bills on time is the biggest factor FICO looks at.

6. Difficulty obtaining future loans and mortgages

Even though gambling itself won’t appear on your credit report, lenders still see the financial fallout. Credit card balances and missed payments affect your FICO Score, while mortgage underwriters also review bank statements for overdrafts and the amount of cash you have in reserve. That helps explain why many prefer other methods, like ewallets and cryptocurrencies, which don’t impact your FICO score.