Pennsylvania files online gaming amendment to eliminate credit card deposits
A bill that would change the rules for players to fund online gambling accounts has been filed in Pennsylvania's capital, Harrisburg.
It was reported last month that Sen. Wayne Fontana (D-Allegheny) was drafting legislation to change the regulatory framework for online gambling. Fontana in March cited rising consumer credit card debt in Pennsylvania and said gambling on credit should not be allowed.
This week, Pennsylvania state senators filed Senate Bill 1159 . The law proposes eliminating credit cards as an acceptable payment method for funding lottery games, interactive slot and casino table games, sports betting and fantasy sports online gambling accounts.
The measure is before the Senate Community, Economic and Recreation Development Committee for consideration.
Consumer Protection
Pennsylvania’s online gaming market is one of the richest in the country.Pennsylvania Lottery sells over $5 billion in lottery tickets annually, making it the eighth largest state lottery in the United States.
Pennsylvania's regulated iGaming platforms won more than $1.74 billion from online slot and table game players in 2023, while gaming operators retained nearly $459 million in sports betting, much of it online of. Last year, fantasy sports operators made more than $20 million in game fees in Pennsylvania.
Since 2020, iGaming revenue has grown by more than 200%. Sports betting profits increased 142% during the same period.
Fontana believes it is time to ensure online gamblers in the Commonwealth keep their gambling activities within their financial means and do not take out loans to fund their gambling. The state senator said a pillar of irresponsible gambling is borrowing money to gamble, which is essentially what the state allows through credit card licenses.
Fontana cited a 2022 study from Pennsylvania State University that found more than 36% of online gaming participants reported at least one gambling problem.
Gambling and credit card debt often go hand in hand, as the disorder can lead to financial problems that impact the ability to repay debt," Fontana explains.
Fontana's SB 1159 was introduced with six co-sponsors, including state Sens. Amanda Cappelletti (D-Delaware), Jim Brewster (D-Allegheny), Jay Costa (D-Allegheny), Jimmy Dillon (D-Philadelphia), Lisa Baker (R-R-Wyoming) and Timothy Kearney (D-Delaware).
Market Preparation
Penn State University released a report this month on the state's online gambling industry and found that participation rates rose significantly last year. Researchers found that 16% of adults in the state gambled online in 2023, a 5% increase from 2022.
As Pennsylvania residents accumulate debt, online gambling participation continues to grow. According to Experian, the average monthly card balance transfer in Pennsylvania is nearly $6,000, significantly higher than before the pandemic in 2019, when online gambling was still in its infancy.
Carrying a credit card balance is widely considered one of the worst financial decisions a consumer can make. Credit card interest rates are high, and inflation and the Fed's rate hikes will only exacerbate this.
While credit cards lure consumers with 0% APR offers, the average credit card interest rate this month is nearly 25%.
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Source: www.casino.org
