Why you should not use credit cards to wager on March Madness

Why you should not use credit cards to wager on March Madness

The American Gambling Association predicts that by the end of the 2023 NCAA tournament, one in four Americans will have bet a total of $15.5 billion on March Madness games. Normally, Matt Cappelen, a firefighter from Elk Grove Village, Illinois, who is now 34, would have been right in the thick of things. Nonetheless, he will be watching the betting game from the sidelines at this year’s dance.

Cappelen has always been an avid sports lover. Almost everything with a victor and a vanquished appealed to me.

Cappelen’s enthusiasm for sports has only grown since Illinois legalized online sports betting in 2020.

So far as I could tell, I could make a living and play sports at the same time,” he remarked. Why not try your luck at the casino?

Cappelen spent $83,000 on gambling sites like Bovada and FanDuel over three years. He estimates that as much as 90% of that was paid for with plastic.

You may as well be using play money or phony money. As Cappelen put it, “Monopoly money.”

He never had to worry about paying off his credit card debt since he used his monthly gaming profits to cover the minimum payment.

“I honestly felt I was going to go on a winning streak and get it all back,” he said.

But the good luck was never to be had, and the bills continued to mount on the credit cards. After a particularly devastating late-night defeat on a large bet, Matt told his wife everything. He finally admitted he had a problem and sought assistance by enrolling in Gamblers Anonymous and a credit counseling service. The widespread availability of internet sports betting, however, means that more people than ever before may take the plunge.

Fewer Regulations, More Risks?

After a 26-year federal ban on internet sports betting was overturned in 2018, when the Professional and Amateur Sports Protection Act was repealed, more than 35 states have legalized the practice in some form. Only a small number forbid customers from using credit cards to finance wagers.

Betting operators estimate that only a small amount of the $15.5 billion that will be wagered on March Madness this year will be placed using credit cards.

According to Keith Whyte, director of the National Council on Compulsive Gambling, “using a credit card for gambling is clearly increased risk.” However he refrained from drawing any firm conclusions on the relationship between credit card use and compulsive gambling, saying that more study was needed.

There needs to be more information on the precise impact of credit card use for American gamblers due to the relative novelty of legal online sports betting in the United States. However, the Sloan School of Management at MIT concluded that “(credit cards)’step on the gas’ by driving motivation to spend” in a 2021 study on general credit card usage.

Meanwhile, in the United Kingdom, where online sports betting has been legal and widely available for a considerably longer period, the use of credit cards is set to be prohibited as of the year 2020. The UK Gambling Commission based their decision to prohibit credit card payments on online gambling because “22% of online gamblers using credit cards (were) problem gamblers, with many more suffering some sort of gambling harm” in 2019.

Hidden Costs of Credit Card Gambling

There are consequences beyond escalating debt that you should be aware of before using a credit card for sports betting. Whyte explains that “losing more money than you planned” is another sort of gambling harm.

Credit card interest and fees can quickly exceed the initial bet when losses exceed winnings. Negative repercussions to your credit score might result from careless actions like making payments late or a sudden increase in your credit card usage.

Furthermore, because credit card companies, payment processors, and betting sites have their own gambling policies, fees are often unpredictable and can mount up quickly. Foreign transaction fees, cash advance fees, and other similar charges may apply if the betting site is outside the country.

You can set your own limits on deposits, wagers, and play time on sites like FanDuel. Yet, players typically have to opt in rather than out of these safeguards, and the toggles are often buried. After several demands for comment, FanDuel representatives remained silent.

Rough Road to Victory

Researches, payment processors, and state and federal authorities will argue for years to come over the necessary credit card safeguards for online sports betting, which is rapidly evolving. Cappelen has decided to start the long slog toward rehabilitation rather than chasing bets on this year’s path to the Final Four. Cappelen contacted the non-profit organization Take Charge America for assistance in paying off her $83,000 credit card debt, lowering her interest rate, and consolidating her payments.

Cappelen estimated that it would take 4 years and 8 months to recoup the cost of the scheme, which involved online sports betting. That will be challenging, but not impossible. Thankfully, the conclusion is in sight.



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