Could gambling using a credit card be a reality?

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Gabling with a credit card could soon be a reality

Gabling with a credit card could soon be a reality

One of the few things that a person could not do with a credit card was to gamble in a casino. That may be about to change as a result of the legalization of sports betting in May. Credit card issuers are contemplating whether they should change their rules and are thus reviewing their policies. No announcement has been made as of yet but this could be a major change for some businesses.

Now technically you can use a credit card for gambling. It is not a good investment for the card holder though as it is considered to be a cash advance. This comes with high interest rates with little to no grace period to pay it back and does not accumulate any rewards. Most issuers are trying to discourage its cardholders from using it for gambling as they do not see it as profitable with an increased chance of never being paid back by a problem gambler.

Sports gambling was illegal in every US state except for Nevada until the Supreme Court struck down the Professional and Amateur Sports Protection Act. The law was intended to prevent corruption in competitive sports but was overturned as it was stated that it overstepped the state’s rights to control what goes on within their own borders. With something around $150 billion being wagered in illegal sports betting already it is a good bet that most state governments and credit card issuers see this as a new potential source of income. Nevada after all generated almost $5 billion in legal revenue in 2017.

Most credit card issuers are waiting to see what the Federal government does. It is possible that another law could be implemented at the national level that would avoid the Supreme Court’s objection and once again outlaw sports betting. Sports betting over the Internet using a credit card is also still restricted because of another law that remains in force.

Visa and MasterCard have been working to make gambling transactions easier and more legal. Their proposals would allow for a fraction of a customer’s credit limit being able to be used for gambling activity. New transaction classification codes were created for everything from casinos to horse tracks to even government lotteries. Chase became the first issuer to allow its cards to be used for horse racing in March and everyone has their eyes on what will happen with that.