US sportsbooks move away from credit cards amid rising regulatory pressure

Summary

The US regulated sports betting sector is shifting payment practices: leading operators are curbing or removing credit-card deposits amid heightened regulatory scrutiny, concerns about consumer debt exposure and a greater focus on transactional risk management. This reflects a move from volume-driven growth to prioritising revenue quality, sustainability and traceability.

Key Points

Major operators (DraftKings, FanDuel, BetMGM) are restricting or eliminating credit-card deposits even where allowed by law.
Sen. Elizabeth Warren and the Senate Banking Committee have sought information on credit use and cash-advance style fees charged to bettors.
A Federal Reserve Bank of New York study links mobile sports betting availability to rises in delinquency and small declines in average credit scores, especially among younger bettors.
Several US jurisdictions are tightening rules: Maine enacted a credit ban for online betting, Massachusetts increased enforcement (including a USD 450,000 fine), and Iowa already forbids credit-card funding.
Operators are favouring debit cards, bank transfers and digital wallets to reduce chargeback risk and improve traceability and compliance.
The trend mirrors international practice: Great Britain, Ireland, Australia and Brazil restrict or exclude credit for bets for harm prevention and AML reasons.

Content summary

The article outlines a structural realignment in how US sportsbooks accept funds. The American Gaming Association reports continued market growth in 2025, but operators increasingly emphasise how growth is financed. Firms have proactively limited credit-card use to reduce exposure to chargebacks, consumer debt issues and reputational risk.

Regulatory and political pressure is rising: Congressional inquiries and state-level actions are reframing credit-card betting as a consumer-protection and financial-transparency problem. Empirical evidence from the Federal Reserve Bank of New York suggests mobile betting expansion correlates with measurable deterioration in credit metrics for affected users, supporting regulators’ concerns.

Commercially, the change has limited short-term impact on funding mix because credit was never the dominant channel for regular bettors; nonetheless, it is symbolically significant and signals market maturity — operators now prioritise margin quality and risk-adjusted revenue over raw handle growth.

Context and Relevance

This is important for payments teams, compliance officers, investors and regulators. Payment rails shape player behaviour, AML controls and operational costs; removing or restricting credit changes chargeback exposure, KYC/ID processes and product economics. The move also fits a global pattern where regulators treat credit funding as incompatible with responsible gambling and traceability goals.

For operators, vendors and investors, anticipating and adapting to a credit-averse payments landscape will be key: expect increased adoption of bank transfers, open-banking flows, debit and wallet integrations, and tougher deposit controls and identity checks in online-only markets.

Author

Diego Fiz — Punchy take: this isn’t just payments housekeeping. It’s a pivot in how the industry defines sustainable growth. Read the detail if you handle compliance, payments or strategy — it changes risk and revenue maths.

Why should I read this?

Quick and blunt: operators are rewiring how bettors pay. If you work in payments, compliance, product or investment in iGaming, this story tells you which levers are changing — and why ignoring them risks regulation, fines and hidden costs. We read the heavy detail so you don’t have to.