Even before it became legal at the state level in 2018, the U.S. had the largest financial loss to sports betting in the world. Since then, Americans have wagered more than half a trillion dollars on athletics.
Today, sports betting and prediction markets are ubiquitous. Point-of-sale gift cards at familiar retailers have made the habit even more accessible.
“It’s certainly concerning as an access point,” says Cait Huble, the director of public affairs at the National Council on Problem Gambling, or NCPG. “When you’re gambling with a gift card or credits, you don’t have the cognitive awareness that this is real cash that you’re losing. It can be harder to track or you can make riskier decisions.”
What’s the real cost?
Most gambling apps bar customers from gambling on a credit card, because the risk of spending money consumers don’t have is high.
“One of the core tenets of responsible gambling is: Don’t bet money you can’t afford to lose,” says Huble. “And when you’re gambling on credit versus having your own budget and limit, it’s a lot easier to overspend.”
Gift cards come with a caveat, says Huble. You can use credit cards to purchase gift cards, which then allow you to spend the money gambling sites warn against.
Traditional payment options like bank transfers, debit cards, and credit cards sometimes require personal information or charge merchant fees to cover the gambling’s associated risk. Gift cards bypass these, making them a more convenient alternative.
Beyond spending convenience, point-of-sale gift cards normalize sports betting; many consumers buy gift cards as birthday or holiday gifts. A sportsbook gift card can act as a gateway drug, leading a first-time bettor to deposit more, according to Birches Health, an online behavioral addiction program.
The pattern is particularly risky for young men, whose underdeveloped brains are more susceptible to gambling addiction. More than one-third of boys gamble before they turn 18, and 12% of adolescent boys bet on sports, according to Common Sense Media, which provides age-based media reviews.
Credit card users experience a phenomenon called “payment decoupling,” where mental separation occurs between making a purchase and actually losing money. Gambling experts say sportsbook gift card users of all ages experience a similar phenomenon—making it even more difficult to address problematic behavior.
“The more layers you can build between the actual outcome of winning or losing money, and the actual physical sense of spending or losing money, these [strategies] are just to capture kids or just people’s income in general,” says Michael Robb, head of research at Common Sense Media.
Another gateway to gambling
In 2018, the Supreme Court struck down the Professional and Amateur Sports Protection Act, turning authority on sports betting to individual states. Since then, the industry has rapidly grown, and is now legal in 39 states and Washington, D.C.
Gift cards quickly followed, with DraftKings rolling out the first product in December 2020. Since then, BetMGM’s and Caesars’ sportsbooks have released gift cards, and companies like BlackHawk Network and GameOn began to offer multibrand gift cards.
For sportsbooks, the move was obvious, another way for players to fund their accounts. Gift cards help bring customers to the app, according to a major sportsbook representative who spoke off the record.
These companies know that point-of-sale gift cards make sports betting more accessible. But they don’t see this as a risk. Many platforms require the same Know Your Customer verifications that bank accounts use. They also enforce strict account monitoring policies, and flag customers who repeatedly upload gift cards.
According to the spokesperson, sportsbooks view these gift cards as a safer alternative; gift cards give consumers a set limit, rather than allowing limitless spending possible on credit, debt, and cash payments.
Increasing risk as sports betting grows
Despite the sportsbooks’ efforts, state regulation is lagging.
The National Council on Problem Gambling’s Internet Responsible Gambling Standards show that most states fall short on safe gambling regulation. Only 10 states and Washington, D.C. meet more than 40 of NCPG’s 82 standards for safe internet gambling.
Even when apps ensure identities and track transactions, workarounds allow children access to sports betting, including relaxed age verification and proxy betting through parents. An NCPG survey released in March found that 65% of adults over 21 reported gambling before reaching the legal age.
In sports contexts, where betting terminology is mainstream in broadcasts, social media, and marketing campaigns—six in 10 boys report seeing gambling ads on social media—betting has become a common part of the sports experience, says Robb at Common Sense Media.
But what feels like everyday fun for fans can turn sour. NCPG reported that 24% of fantasy sports bettors and 17% of traditional sports bettors reported problematic behaviors.
Yet many addicts aren’t able to get the help they need.
As Fast Company reported in April, there are more gambling apps than gambling rehabilitation centers in the United States. Gambling addiction, like drug and alcohol addiction, is a dopamine problem. Yet while there are thousands of drug and alcohol rehab centers across the country, there are fewer than 10 residential facilities that exclusively treat gambling addictions.
Worse, many gamblers aren’t willing to change their habits. NCPG reported that 37% of people engaging in risky play believe recovery is unlikely.
As gift cards make gambling habits more commonplace, NCPG and Common Sense Media recommend parents set expectations and family rules around gambling before it becomes a household issue.
“This is a vulnerable period for kids and teens, who tend to be more impulsive and driven by excitement,” says Robb. “I think the losses can feel a bit more abstract, and the wins feel more emotionally powerful. They aren’t fully equipped to manage the risks associated with gambling.”
