DraftKings no longer allows credit card deposits in the U.S., but the major change to the sports betting giant’s operations does not affect its business in Canada.
America’s second-largest online sportsbook by handle and revenue told its customers that it will stop accepting credit cards as a method of funding sportsbook and casino accounts as of Monday, Aug. 25.
In a statement provided to Canadian Gaming Business, a DraftKings spokesperson said the change is a “strategic business decision” intended to help customers avoid cash advance fees and higher interest rates. In many places, including Canada, certain banks charge some kind of fee for using credit cards to pay for online gambling funds.
The spokesperson clarified that, despite the U.S. change, DraftKings will still accept credit cards for deposits in Ontario. The Alcohol and Gaming Commission of Ontario (AGCO) allows credit card funding as one of numerous approved deposit methods.
DraftKings operates online sports betting and online casino gaming in Ontario via its own platform. As of Aug. 19, its Golden Nugget Online Casino brand, which has a strong presence in several states, is also live in Canada’s only regulated commercial iGaming province.
Voluntary change comes amid US regulatory scrutiny
While DraftKings said its decision is not a reaction to any regulatory concerns, the use of credit cards for iGaming is a somewhat contentious issue south of the border.
Numerous states prohibit their use for online gambling, either through legislation or regulations, including Connecticut, Iowa, Massachusetts (which recently fined DraftKings US $450,000 for erroneously allowing credit card payments), New Hampshire, Oregon, Rhode Island, Tennessee and Vermont. The Illinois Gaming Board (IGB) updated its regulations to ban them for sports wagering accounts in April.
As well as those states, DraftKings already did not take credit cards in some other jurisdictions, including New York, Pennsylvania and Washington, D.C.
Meanwhile, some other operators, including the currently U.S.-only Fanatics as well as sportsbook and fantasy gaming operator Betr, also limit the use of credit cards.
While a variety of payment options exist, including debit cards, INTERAC and other bank transfer systems, and payment platforms like Apple Pay, credit cards are a relatively popular deposit method in Canada.
A survey from payments company Paysafe late last year suggested that credit cards rank third in the list of Ontario sports bettors’ preferred iGaming deposit options, behind only debit cards and digital wallets. The report also determined that Ontario is far above the global benchmark for credit card usage in online sports betting.
However, some observers have cited concerns over the potential of gamblers overspending and falling into debt by using credit cards for their gaming activity. The National Council of Legislators from Gaming States (NCLGS) drafted model legislation last year for state gaming regulators to use as a blueprint, and recommended outlawing credit cards in the guidelines.
