BetMGM Begins Phasing Out Credit Cards, Blocks New Ones

BetMGM has officially pulled the plug on credit card use for its sports betting and online casino operations. The company announced that as of Tuesday, March 31, it is no longer accepting new credit cards.

BetMGM Ends New Credit Card Use – Begins Phasing Existing Ones Out

Customers who have funded bonuses and accounts with their existing credit cards will be allowed to play through the amounts before having their credit cards removed as well.

The transition will take a while, but BetMGM has made a decisive step, joining an industry-wide trend with other gambling mastodons also opting out of the payment option, citing risks to consumer protection.

The decision to pull the plug on credit cards, though, has a wider business rationale behind it. BetMGM was recently fined $100,000 in Pennsylvania after the state gaming regulator discovered that thousands of accounts were opened in people whose identities had been stolen.

Removing the use of credit cards would help BetMGM tackle similar cases of fraud in the future. The limitation of this funding method would have an immediate impact on consumer protection, as well as make it harder for fraudulent third parties to abuse stolen data.

Deeper Business Rationale as Credit Cards Ban Is Good for Companies

Financially, companies have very little reason not to opt for this path, too. According to Citizens JMP Securities analyst Jordan Bender, DraftKings, which stopped accepting credit card payments in September, has not experienced any significant adverse consequence.   

Companies have generally agreed that there is no material impact on their bottom line as a direct result of the ban on credit cards.

FanDuel and DraftKings have already been operating in multiple markets that disallow credit card use for funding gambling products, among which are Massachusetts, New Hampshire, Oregon, Rhode Island, and others. 

Banning credit cards is better for PR reasons, but it really serves a much deeper regulatory and financial purpose that gambling companies are interested in.