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A12 BUSINESS
Friday 24 March 2023

Why you should bench credit cards for

March Madness bets

By JAIME HANSON
of NerdWallet
By the end of the 2023
NCAA tournament, an es-
timated one in four Ameri-
cans will have wagered
$15.5 billion in bets on the
various games, according
to the American Gaming
Association. Last year, Matt
Cappelen a 34-year-old
firefighter from Elk Grove
Village, Illinois would have
been in the middle of
the action. For this year’s
dance, though, he’ll be sit- A basketball with a March Madness logo rests on a rack before
ting on the sidelines of the a First Four game between Illinois and Mississippi State in the
betting game. NCAA women’s basketball tournament Wednesday, March 15,
“I’ve always been a die- 2023, in South Bend, Ind.
hard sports fan,” Cappel- Associated Press
en said. “Pretty much any-
thing that involves a winner up. Finally, after a crushing executive director of the
and a loser, I loved.” late-night loss on a par- National Council on Prob-
Since legal online sports ticularly big bet, Matt con- lem Gambling . Yet he
betting was first made fessed it all to his wife. He stopped short of noting
available in Illinois in 2020, knew he needed help, and any specific correlation
the fun of sports had only has since joined Gamblers between problem gam-
gotten that much bigger Anonymous and registered bling and credit card use,
for Cappelen. for a debt recovery pro- citing a lack of research.
“I was able to combine gram. But because online Because legal online sports
making money, or so I sports betting has become betting in the U.S. is so new,
thought, and sports,” he so accessible, many more data is scarce on the exact
said. “What better way to may walk the same road. impact of credit card use
do that than with gam- FEWER REGULATIONS, for American gamblers. But
bling?” MORE RISKS? in a 2021 study on general
But in the three years since, Since the 2018 overturn of credit card spending, MIT’s
Cappelen built up $83,000 the Professional and Ama- Sloan School of Manage-
in gambling debts on sites teur Sports Protection Act , ment found that by reduc-
like Bovada and FanDuel. which lifted a 26-year fed- ing the pain of payment,
Up to 90% of that, he says, eral ban on online sports “(credit cards) ‘step on the
was done on credit cards. betting, more than 35 gas’ by driving motivation
“You feel like you’re play- states have legalized the to spend .” And in Great
ing with fake money or practice in some form . Of Britain, where online sports
play money. Monopoly those, only a handful spe- betting has been legal-
money,” Cappelen said. cifically prohibit the use of ized and widely available
Each month, he used gam- credit cards to fund bets. for much longer, the use of
bling winnings to make the Of the $15.5 billion total credit cards was banned
next minimum payment on expected wager on this in 2020.
his credit cards, never wor- year’s March Madness , This ban came after a
rying about how he would it’s unknown what fraction 2019 study by the United
repay the debt. will be placed using credit Kingdom Gambling Com-
“I legitimately thought that cards, though betting op- mission found “22% of on-
I was going to start to get erators argue that it’s a rel- line gamblers using credit
on a hot streak and win it atively small percentage. cards (were) problem
all back.” That hot streak “Using a credit card for gamblers, with even more
never came, though, and gambling is definitely high- suffering some form of
the credit card debt piled er risk,” said Keith Whyte, gambling harm. “
HIDDEN COSTS OF CREDIT
CARD GAMBLING
Even if you’re willing to ac-
cept the risk of sports bet-
ting with your credit card,
spiraling spending isn’t the
only potential downside.
Other forms of gambling
harm, Whyte explains,
“might just include los-
ing more money than you
planned.”q