Can I use a credit card for sports betting?

In recent years, many states have legalized sports betting. If you’re thinking about trying your luck, you might be wondering if you can pay with a credit card?

The short answer is that you probably shouldn’t.

First, it is often prohibited. Some states that allow sports betting have banned the use of credit cards (including Connecticut, Iowa, New York, and Tennessee).

If the state technically allows the use of credit cards for gambling purchases, many credit card issuers will still not approve these transactions (due to risks of disputes, cost overruns, non-refunds, etc.). One of the largest online bookmakers, FanDuel, lists Bank of America, Chase, Capital One, Wells Fargo, Huntington Bank and Union Bank as financial institutions known to refuse deposits to online betting companies. They are surely not alone.

Finally, even if the state and bank allow you to use a credit card, additional fees may apply. If your credit card issuer allows gambling, there is a good chance they will treat it as cash advances. This usually means an upfront payment (usually $10 or 5%, whichever is higher) plus a higher-than-normal interest rate (probably around 25%) that starts accruing immediately. It is safer to use another payment method.

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How to fund your sports betting account

Many gaming sites allow you to deposit instantly and free of charge using debit cards. You can also initiate an ACH transfer from your bank account (although there is a good chance it will take at least a day to process). Either option will keep you from going into debt by betting on sports. Of course, even if you have money in your bank account, you should not play more than you can afford to lose. It is recommended to set daily, weekly or monthly limits on your bets.

PayPal is another deposit option (although it’s best to withdraw money from your bank account or PayPal balance, as using a credit card to fund your PayPal account incurs a 2.9% plus 30 cent fee). Cryptocurrency is sometimes another possibility.

I recently saw DraftKings (a famous online bookmaker) gift cards for sale at a grocery store. You can buy these gift cards with a credit card, earning rewards and avoiding cash advance fees. However, proceed with caution. You can be guilty of “artificial spending” if you go to extremes, especially when you’re trying to reach the spending threshold on credit card signup bonuses or accumulating a lot of rewards. Basically, it would be money laundering if you used a credit card to buy a bunch of gift cards in order to deposit money into a gaming account, earn rewards, and then withdraw your own money.

Where can you bet on sports?

Some form of sports betting is currently legal in 32 states, as well as the District of Columbia, according to NJ.com. Mobile sports betting is available in Washington, Arizona, Colorado, Connecticut, Illinois, Indiana, Iowa, Louisiana, Michigan, Nevada, New Hampshire, New Jersey, New York, Pennsylvania, Tennessee, Virginia, West Virginia and Wyoming.

bottom line

For the most part, credit card bounty hunters will not be able to earn rewards for their gambling. You could say it’s a missed opportunity, but honestly, it’s probably for the best given the risks involved.

Have a question about credit cards? Email me at [email protected] and I’ll be happy to help.

Ted Rossman is a senior industry analyst at CreditCards.com. He has spent the last decade in the personal finance industry, conducting consumer and industry research and providing commentary for the media and consumers. Its main focuses include credit cards, debt management and credit ratings. Ted regularly shares his advice through major media such as Good Morning America, Wall Street Journal, CNBC and Fox Business. He also writes a weekly “Wealth and Desires” column for CreditCards.com, which is mostly about cashback credit cards.