Why you should bench credit cards for March Madness bets


By the end of the 2023 NCAA tournament, it is estimated that one in four Americans will have wagered $15.5 billion on multiple games, according to the American Gaming Association. Last year, Matt Cappelen — a 34-year-old firefighter from Elk Grove Village, Illinois — would be in the middle of the action. However, for this year’s dance, he would be sitting on the sidelines of the betting games.

“I’ve always been a huge sports fan,” says Cappelen. “Just about anything that involves winners and losers, I love it.”

Since legal online sports betting first became available in Illinois in 2020, the excitement of sports has become so much bigger for Cappelen.

“I could combine making money, or so I thought, and sports,” he said. “What better way to do that than by gambling?”

But in the three years since then, Cappelen has racked up $83,000 in gambling debts on sites like Bovada and FanDuel. Up to 90% of that, he says, is done by credit card.

“You feel like you are playing with fake money or play money. Monopoly money,” said Cappelen.

Every month, he uses his gambling winnings to make the next minimum payment on his credit card, never worrying about how he’s going to pay off the debt.

“I legitimately thought that I would start hitting hot streaks and win them all back.”

But the hot streak never came, and credit card debt piled up. Finally, after a crushing defeat in the middle of the night due to a very big bet, Matt confessed everything to his wife. He knew he needed help, and has since joined Gamblers Anonymous and signed up for a debt recovery program. But as online sports betting has become so accessible, a lot more may be walking down the same path.


Since the cancellation of the Professional and Amateur Sports Protection Act in 2018, which lifted a 26-year federal ban on online sports betting, more than 35 states have legalized the practice in some form. Of these, only a handful specifically prohibit the use of credit cards to fund bets.

Of the $15.5 billion total bets expected on this year’s March Madness, it’s unknown what fraction will be placed using credit cards, although betting operators argue that percentage is relatively small.

“Using a credit card to gamble is clearly a higher risk,” said Keith Whyte, executive director of the National Council on Problem Gambling. But he stopped short of noting a specific correlation between problem gambling and credit card use, citing a lack of research.

Because legal online sports betting in the US is so new, data on the exact impact of credit card use on American gamblers is scarce. But in a 2021 study of common credit card spending, MIT’s Sloan School of Management found that by reducing payment complexity, “[credit cards]’tread the gas’ by encouraging motivation to spend.”

And in the UK, where online sports betting has been legalized and has been widely available for much longer, the use of credit cards was outlawed in 2020. This ban comes after a 2019 study by the UK Gambling Commission found “22% of online gamblers use credit cards (are) problem gamblers, with many more suffering some form of gambling disadvantage. ”


Even if you’re willing to accept the risks of sports betting with your credit card, increased spending isn’t the only potential downside. Another form of gambling loss, Whyte explains, “might include losing more money than you originally planned.”

When the loss occurs on a credit card, the interest and fees can far exceed the original bet. And if you’re not careful, late payments or spikes in credit usage can have a long-term negative impact on your credit score.

Plus — because gambling policies vary widely by credit card issuer, payment processor, and betting site — fees are unpredictable and add up quickly. This can include transaction fees, cash advance fees and even overseas transaction fees if the betting site is located overseas.

Sites like FanDuel do offer tools for gamblers to limit their own deposits, stakes, and time spent. But in many cases gamblers must choose—not escape from—such guardrails, and the options are not prominently displayed. Representatives for FanDuel did not respond to multiple requests for comment on this story.

Online sports betting is changing rapidly, and researchers, payment processors, and state and federal regulators will be haggling for years to come over appropriate credit card guardrails. Instead of chasing stakes on this year’s road to the Final Four, Cappelen embarked on a long road to recovery. To deal with that $83,000 debt, Cappelen sought help through Take Charge America, a nonprofit that works with debt holders to close troubled credit card accounts, negotiate interest rates, and consolidate payments.

“The plan itself will take four years and eight months to pay off,” said Cappelen. “It will be difficult, but it can be done. And at least there’s an end in sight.

If you or anyone you know has a gambling problem, resources are available through the National Council on Problem Gambling. Call or text 800-522-4700 for assistance.

NerdWallet: Can I use my credit card for online gambling? https://bit.ly/credit-card-online-gambling

National Council on Gambling Problems

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