People love to bet on sports. 

How they fund their wagers – down to the cards, wallets and credits used to pay for bets – is drawing increased attention from lawmakers and state regulators. The concern is that credit cards and digital payments via phone-based wallets fuel compulsive gambling and addiction for many people.

Last month, a New York state representative introduced a bill that would prohibit digital wallets from funding sports bets. Other states, including Iowa and Massachusetts, have banned credit cards for gambling.

“People get trapped into this thing and one way to calm it down is to limit the amount of money that people can spend on it and that’s what this bill tries to do,” New York Rep. Phil Steck said in an interview Wednesday of his proposed ban on e-wallets for sports betting.

Model online gambling legislation drafted in November by the National Council of Legislators From Gaming States endorses the use of digital wallets for wagering, but only if a wallet provider, such as Apple or PayPal Holdings, offers “assurance that a credit card has not been used to deposit funds.”

In April, Illinois became the seventh state to ban credit cards for sports wagering when the Illinois Gaming Board advanced a proposed rule for public comment and adoption. Illinois already prohibits credit card use for casino and video gambling.

“There is a growing body of recent research showing that restrictions on credit usage to fund wagering accounts encourages responsible gambling and mitigates the harms of compulsive gambling,” the Illinois board’s administrator, Marcus Fruchter, said in an April press release.

Digital wallets, however, present regulators with another payment source to consider.

At the same meeting where the Illinois board banned credit cards, the panel voted to allow digital wallet use at the state’s 17 casinos to fund wagers and withdraw credits or winnings.

Last week, Caesars Entertainment announced a new “universal” digital wallet for its Sportsbook app in 18 states and the District of Columbia. The new wallet will give sports bettors “a consistent experience wherever they go, with their account, funds, and rewards all in one place, just as it should be,” Caesars Digital President Eric Hession said in a July 10 press release.

New York is the top state for sports betting, with a $69.8 billion in total sports wagers since the state allowed such bets in early 2022, according to the trade journal Legal Sports Report. In 2018, the Supreme Court overturned a federal ban on sports betting, with 40 states now allowing such wagers.

One issue with e-wallets in gambling is that they “seamlessly connect multiple funding sources,” said Steck, who focused his bill on mobile sports betting and sees a stark difference between online gambling and betting in-person at casinos.

“If you can do it from your computer and do it from your phone, the possibilities are limitless,” said Steck, a lawyer who represents suburban Albany and Schenectady. “Whereas if you have to actually go to a casino to place a bet that requires a lot more doing. The phone and computer, and particularly the phone, has increased this problem tremendously.”

Steck’s bill, along with six others related to gambling, didn’t pass in New York’s legislative session this year before ending in June, but will be reconsidered in January when the body reconvenes. 

At the federal level, Sen. Richard Blumenthal, a Connecticut Democrat, and Democratic Rep. Paul Tonko from New York are pushing legislation that would ban credit cards for sports wagers and require an “affordability check” before allowing someone to wager more than $1,000 in 24 hours, or $10,000 in a 30-day period.

Among several provisions, their Supporting Affordability and Fairness with Every Bet (SAFE) act would also limit gamblers to no more than five deposits into a gambling account over 24 hours. 

“Just as the federal government established guidelines with the tobacco or alcohol industry, we must take action to limit the harm of this addictive product,” Tonko said in a March press release as the two introduced their bill a second time.

Last year, U.S. sports betting totaled a record $148 billion, with roughly 95% of the total wagered online through companies such as BetMGM, Draft Kings and FanDuel, according to data from the American Gaming Association. Through April, gaming revenue for U.S. sports betting rose about 11%, to $5.1 billion, from the same period last year.

In 2024, 77 million Americans wagered on sports online or participated online with fantasy sports teams, according to survey data released earlier this month by the Fantasy Sports & Gaming Association. Of the 4,959 people queried in the U.S. and Canada, 72% of both fantasy sports participants and sports bettors said both gambling activities were “an easy way to make money.” 

Seventeen jurisdictions restrict the use of credit cards, government-issued checks or stored value cards for public benefits at casinos and for online gambling, according to the American Gaming Association.

“The majority of gaming operators and suppliers voluntarily implement responsible gaming programs with measures that go above and beyond the minimum requirements formally mandated by law, regulation or code,” the AGA said in its 2025 Responsible Gaming Regulations and Statutes Guide.

A paper published last year by three Swedish researchers, cited in Steck’s bill, found that digital payment solutions affect gambler behavior in various ways, and offer an “illusion of control” over spending.

“Participants felt that they were in control of their spending since they authorized the deposit ‘button’ at all times, while the frictionless payment flow diminished the money spent,” according to the paper, “Probing the Role of Digital Payment Solutions in Gambling Behavior,” in the JMIR Human Factors journal. 

These payment methods’ “inherent flexibility and invisibility” for gamblers “enabled the mediation of conflicting values and facilitated impulsive deposits over rational decision-making,” said the academics from the Karolinska Institutet and the Centre for Dependency Disorders in Stockholm. The paper was based on data from a 90-minute group interview with six people who had sought treatment for gambling issues.