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Online Sports Betting and Your Credit

Online sports betting has grown in popularity as more states have opted to legalize it after a federal ban was overturned in 2018. If you’re in one of more than 20 states that have adopted online sports betting, it now seems like almost every commercial break, especially during sporting events, is for an online sportsbook. For many, sports betting is a way to make watching their favorite team or sport more entertaining. But, of course, gambling does come with risks.

Learn about the indirect ways online sports betting can impact your credit and get tips for using online sportsbooks responsibly:

Online sportsbooks and credit cards

Online sportsbooks accept a variety of deposit methods, including bank transfers, debit cards, digital wallets and credit cards. Though some states don’t allow sportsbook operators to accept credit cards, many online sportsbooks in states where it is permitted will accept credit cards as a means to fund your account.

If you deposit with a credit card, you typically have to use another method to withdraw your money, like an online bank transfer, mailed check or digital wallet. In some cases, if the online sportsbook has a presence at a physical casino in your state, you can also cash out your funds there.

Online sportsbooks have different processing times for withdrawal requests. Some can review and process the withdrawal within 24 hours, but for others it could take several days. When you receive your money after the review will usually depend on the type of payment option you’ve chosen. Naturally, you can expect digital payments to arrive sooner than a physical check.

Online sports betting and your credit health

Be mindful when using credit cards to fund online gambling accounts.  Your credit utilization rate is an important credit score factor. If you make deposits into online sportsbooks using a credit card, a type of revolving credit, and don’t pay those balances down before your lender reports your account information to the credit bureaus, it could have a negative impact on your credit score.

If you’re playing frequently and it’s negatively affecting your budget, the risk of missing payments on your bills can increase. According to TransUnion’s Q2 2022 Online Sports Betting Study 79% of mobile sports bettors were concerned about their ability to pay current bills and loans in full. Because payment history is another major credit score factor, missing a payment can also have a significant, negative effect on your credit score.

Playing for fun with money you’re prepared to spend and not get back is a healthy way to approach online sports betting. But don’t rely on winning to repay your bills or loans. If your bets aren’t successful, this could lead to you not being able to pay down your credit card balances in a timely fashion and potentially missing payments.

Know the online sportsbook’s rules

Some sportsbooks may offer enticing promotions for first-time users. These promotions may be in the form of “free” bonus money or refunded bets on your first wager if it loses. Often, this “free” money is in the form of betting credits that can only be used on the sportsbook site or app. These typically can’t be cashed out immediately, but are redeemed toward another bet.

For instance, if you received a $25 free bet or bonus bet in your account after losing your first wager, you’d have to use that $25 to make an additional bet before being able to cash it out. If that bet were to win, you could then withdraw that $25 and the additional winnings from that bet. If the bet were to lose, the $25 credit would be removed from your account.

Make sure you understand how online sportsbook promotions and how their credits are awarded so you’re fully aware of how much the promotion is truly worth to you. You don’t want to think you’re getting $500 in cash for free immediately. In reality, it’s a credit that takes time to play through, and you may not get that money back at all. It depends on your win/loss record with those bonus bets.  

Always gamble responsibly

For most people, gambling is a hobby and form of entertainment, so you want to deposit and wager only with money you can afford to lose. It’s important for sports bettors to understand how to gamble responsibly to ensure your credit health and financial well-being are not negatively impacted. For more information about responsible gambling, the National Council on Problem Gambling has additional resources. You can also call their helpline at 1-800-522-4700.

Disclaimer: The information posted to this blog was accurate at the time it was initially published. We do not guarantee the accuracy or completeness of the information provided. The information contained in the TransUnion blog is provided for educational purposes only and does not constitute legal or financial advice. You should consult your own attorney or financial adviser regarding your particular situation. For complete details of any product mentioned, visit transunion.com. This site is governed by the TransUnion Interactive privacy policy located here.

What You Need to Know:

The credit scores provided are based on the VantageScore® 3.0 model.  Lenders use a variety of credit scores and are likely to use a credit score different from VantageScore® 3.0 to assess your creditworthiness.

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