On March 12, in a federal courtroom in Jacksonville, Florida, Megha Parekh read a victim impact statement on behalf of the Jacksonville Jaguars. The team had been the victims of a $22.2 million embezzlement by one of its financial managers who had lost control of his gambling.

Amit Patel, 31, was sentenced to 6½ years in prison after pleading guilty to fraud. He acknowledged using the team’s virtual credit card to fuel his gambling, depositing approximately $20 million on FanDuel and $1 million on DraftKings, according to court documents. Patel was diagnosed with a gambling disorder last March, a month after he was fired by the Jaguars, according to his attorney.

“We have empathy for addicts,” Parekh, the Jaguars’ chief legal officer, told the court. “But he didn’t do what others have done and come to the team for help. We would have connected him with resources to help him with his addiction.”

Federal prosecutors traced Patel’s gambling back to his high school days, playing poker, betting on sports and daily fantasy. Through it all, he was armed with the same tool — a credit card.

Credit cards are banned for use with online gambling in the United Kingdom and Australia, but only a handful of states in the U.S. prohibit sportsbooks from accepting credit card deposits. According to data from international payment processor Paysafe, credit cards are the preferred deposit method of 25% of sports bettors in the U.S., behind only debit cards.

The Consumer Financial Protection Bureau (CFPB), the federal agency that oversees consumer protections in the financial sector, reported an increase in complaints regarding credit card deposits with online sportsbooks. Some consumers have alleged being “charged a separate cash advance fee for each wager, with no alert or warning,” according to a 2023 report by the CFPB, while others said they were unaware that using a credit card for online gambling could be treated as a cash advance.

Jay Zagorsky, an associate professor at Boston University who studies personal wealth, notes that America is in the midst of savings and self-control crisis, pointing to a recent survey indicating that 60% of Americans are living paycheck-to-paycheck and another showing that many Americans are worse off financially than they were one year prior. He believes that sports betting should be only for those who have expendable income and can stick to their budget, which doesn’t characterize many Americans at the moment.

“We should ban credit cards from being used in sports gambling,” said Zagorsky, who leads the Questrom School of Business. “In some ways, I’d like it to go back the way it was 25 years ago, when you met your bookie and you prefunded your account with cash.”

UK, Australia have banned credit card gambling

The United Kingdom banned the use of credit cards to fund gambling accounts in April 2020 and says the implementation of the policy has been successful.

Australia passed legislation banning credit cards for gambling in December 2023. The National Centre for Social Research, a prominent not-for-profit research organization in the U.K., is conducting a study on the impact of the credit card ban on the betting industry, but results have yet to be released.

Calls for similar policies are increasing in the U.S. Out of the 38 states with legal betting markets, only Iowa, Tennessee, Massachusetts, Maine and Vermont have credit card bans in place. New York has a $2,500 annual cap on credit card deposits to sportsbooks, and similar legislation is being considered in Louisiana and Pennsylvania. But in the vast majority of states, bettors are allowed to fund their sports betting account with credit cards.

In introducing a bill to prohibit credit cards for gambling, Pennsylvania state Sen. Wayne Fontana cited a recent report from the state’s independent fiscal office that showed credit card balances were 12% higher than prior to the coronavirus pandemic.

“Online gambling and sports betting are growing exponentially, especially with young adults,” Fontana said in release. “At the same time, credit card debt is climbing. So we need to make sure the greater access to gambling isn’t leading to burdensome or crippling credit card balances.”

The newest state to legalize online sports betting, North Carolina, left no restrictions on credit cards. State Rep. Jason Saine told ESPN via email that the state allows credit cards because “those who aren’t responsible with their credit are already self-limited as to what capital they can access” and “credit cards, in many cases, offer better protection against fraud and other uses by those with nefarious intentions.”

“I would not support a ban on credit cards for sports betting,” Illinois State Sen. Dave Syverson says. “People should not have to look at potentially higher cost financial options or even illegal options as alternative to credit cards. The harder a state makes it for consumers to legally sports bet, the more likely it is they will go to or continue with offshore betting. This would be the case especially for gambling addicts.”

More on credit cards

Experts warn that, with the odds already stacked in favor of the bookmakers, bettors who are accruing fees when making deposits with credit cards are at an insurmountable disadvantage and in danger of racking up debt.

“They are paying far more than they are actually wagering,” Dr. Michelle L. Malkin, founder and director of the Gambling Research and Policy Initiative at East Carolina University, told ESPN. “A $100 bet is actually a $100 plus their annual fees and everything like that, plus their interest rates.”

Credit cards allow bettors with solid credit history to wager past their means, even when it doesn’t make financial sense. Younger bettors, who are just establishing credit histories, could put themselves in danger of damaging their credit and getting stuck in a vicious cycle of chasing losses and racking up hefty bills. Malkin added that such bettors might never be able to build solid credit.

Zagorsky, the Boston University professor, grew up in a family of gamblers, spent time with his grandfather at the dog track and bet in his past. Today, he says, he doesn’t bet.

“Not because I’m against betting in any way, shape, or form,” he said. “It’s just I calculated my rate of return … I could earn more flipping burgers.”

Zagorsky says he wouldn’t discourage a student from walking across the street and betting on a few March Madness games, as long as it was with cash. He fears, though, that the modern sports betting market doesn’t have enough protective friction to prevent someone from spiraling out control. He believes requiring all betting transactions to be in cash would slow people and additionally create more jobs. He also knows we’re living in a digital age and changing the tide away from physical currency would be challenging.

“What we’ve seen in society, taking a long-term historical view, is that ideas that prevent us from hurting ourselves sometimes are tried,” Zagorsky said.

Access to credit cards were a catalyst in the downfall of Patel, the former Jaguars employee headed to federal prison. They were a tool he had from the beginning of his gambling activity.

“Mr. Patel had his mother’s credit card at the beginning of his gambling disorder; he possessed his employer’s AMEX card while working at Deloitte; and he possessed the virtual credit card (VCC) while employed at the Jaguars,” Alex King, Patel’s attorney, wrote in a court filing. “The linear connection among these events explains Mr. Patel’s evolution to gambling from adolescence through the instant offense.”

*March is Problem Gambling Awareness Month. If you or a loved one are experiencing signs of problem gambling, contact the National Problem Gambling Helpline, 1-800-GAMBLER.