Banking
Credit Card Gambling Fees
Trying to fund an online casino or sportsbook account with a credit card? Think twice. Your card issuer may treat that deposit as an expensive cash advance, or even block the transaction outright in some cases.
It all comes down to the merchant category code (MCC) attached to every card transaction. Online gambling typically falls under code 7995, the code for betting, wagering, lotteries, and the like. This is the very code merchants use to identify transactions related to these activities, and issuers look for to assess terms. Mastercard’s merchant rules define gambling transactions as any card activity involving the placing of a wager, to include casino, sportsbook, and horse-racing transactions among other identified categories.1
When the law or regulator bars credit cards
Some jurisdictions have moved to insulate gambling customers from paying using credit. On 14 April 2020, the UK Gambling Commission’s ban on gambling with credit cards took effect in Great Britain.
In Massachusetts, the sports wagering law states that "sports wagering operator shall prohibit any use of credit cards, directly or indirectly, including through an account funded by credit card, in placing sports wagers."2
Already, in Massachusetts General Law Chapter 23K, operators are prohibited from making loans, providing credit or an advance of value for wagering, unless authorized by regulation. And a Senate bill text makes the direct statement that "A wager shall not be paid by use of a credit card."
Why the bill can get expensive fast
Cash advances with credit cards can be costly. Transactions get classified as cash advances, and charge higher fees and interest, often with no grace period. It all starts with the cash advance fee, which typically ranges from 3% to 5%, with a minimum of around $10.
The card's interest for cash advances almost always runs higher than that for purchases.5% per year, levied daily.
Cash-advance interest is most brutal when a deposit is kept in the casino account.
How to be sure
Most card issuers list typical activities subject to fees in their agreements. If not, call a representative.
Gambling codes, issuer practices, and regulatory prohibitions vary by jurisdiction, as these nuances show.
An issuer that charges cash advance fees for code 7995 transactions can make gambling costly.
Worked example
Illustrative example: a $200 deposit treated as a cash advance
| Item | Amount |
|---|---|
| Deposit charged to the card | $200.00 |
| Cash advance fee (5%, $10 minimum) | $10.00 |
| One month of interest at 29.99% APR | $5.25 |
| Owed after one month | $215.25 |
Illustrative rates only: check your card agreement for the real fee and APR. Interest on cash advances usually starts on the day of the transaction.