Pennsylvania Senator Eyes Banning Credit Cards for Online Gambling

In 2006, the U.S. legislature passed the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA). While the original intent of the bill was to ban online gambling operators from accepting U.S. gamblers, the real purpose of the bill was to stop the use of the Federal Wire system to enable U.S. gamblers to fund their offshore gambling accounts. That included sending wires, doing direct bank transfers, using third-party money transfer companies like Western Union, and using credit/debit cards.

The reality is the law was never strictly enforced. The only prosecutions were attributed to parties that clearly abused the system. By the time the SCOTUS lifted the nation's ban on sports betting and internet gambling in 2018, blocking the use of credit/debit cards became a thing of the past.

It's complicated because laws still exist that make it illegal to use the Federal Wire system to fund gambling accounts. However, almost every state that has legalized some form of online gambling has found a way to work around existing laws. That's why credit/debit card funding of legal U.S. online gambling accounts is still the nation's most popular gambling account banking option.

Pennsylvania Senator Wants to Ban Credit Cards as a Online Gambling Funding Option

March is National Problem Gambling Awareness Month. This has stirred legislative discussions related to the potential harm that could befall online gamblers who rely on credits cards as a funding option. This has not been lost on State Senator Wayne D. Fontana in Pennsylvania.

While no bill banning credits cards to fund online has been presented on the PA House or Senate floors, Sen. Fontana has indicated that will change very soon. It is his intention to secure co-sponsors and present a bill on the Senate floor that would address what he feels is a serious problem in his state. In a memo to Senate membership, he stated:

"Gambling and credit card debt often go hand in hand since this disorder can lead to financial problems that affect one’s ability to pay off debt. Therefore, I will be introducing legislation that would prohibit the use of credit cards for iLottery, online casino games, and sports betting and fantasy sports."

He goes on to further asset that PA residents have an average credit card debt of $5,640. It's his contention that the state should not support gambling activities that could add to the average debt and start causing problem gambling issues.

The Possible Impact of a New Law That Bans Credit Card Usage for Online Gambling

At this point, approximately 40 states have legalized some form of online gambling. In most of those states, credit cards are the number one banking option. A recent study by the University of Liverpool indicated that the UK's biggest gambling losers were 3x more likely to have used credit cards to fund their gambling activities. That's the premise for Sen. Fontana's concern.

If such a bill was signed into law in Pennsylvania, the likelihood other states would follow suit is very high. It's a good bet that such laws would have a negative impact on online gambling revenue. That would translate to lower tax revenue in states where said laws existed. All eyes will be on PA in coming months.