Industry leaders controlling over 70% of the market shift toward debit and cash-based deposits amid regulatory pressure
The U.S. online sports betting industry is undergoing a major payment transformation as FanDuel and DraftKings, which together control more than 70% of the market, eliminate credit cards as a funding option. FanDuel announced that it will officially stop accepting credit-card deposits starting March 2, following a similar decision by DraftKings (DKNG) last summer. The move effectively signals a broader shift across the industry toward alternative payment methods such as debit cards, bank transfers, and digital wallets.
FanDuel stated that the change is intended to “improve the deposit experience” for customers, but the decision also comes amid increasing scrutiny from regulators and lawmakers. Senator Elizabeth Warren recently criticized the sports betting industry, highlighting the high fees associated with credit-card betting. Many credit-card companies treat gambling deposits as cash advances, often charging fees of $10 or 3% to 5% of the transaction amount, along with immediate interest accrual. These additional costs can significantly increase losses for consumers who may already face financial risks from betting.
DraftKings previously cited similar concerns when implementing its credit-card ban, emphasizing customer protection and transparency. The company had also faced regulatory action, including a $450,000 fine from Massachusetts regulators for failing to adequately prevent prohibited credit-card use.
The impact of these policy changes extends beyond individual companies. Given the market dominance of FanDuel and DraftKings, their decisions will reshape how most Americans fund online sports bets. Several states, including Massachusetts, Iowa, Tennessee, Rhode Island, Oregon, and Vermont, have already banned credit-card use for sports betting, reinforcing the trend toward tighter controls.
Industry observers expect other betting operators to follow suit, particularly as consumer protection becomes a central issue in the rapidly growing sector. While some companies, including Fanatics, have never allowed credit-card deposits, others may now face pressure to adapt.
Looking ahead, the removal of credit cards could reduce impulsive betting driven by borrowed funds, potentially promoting more sustainable customer behavior while redefining the operational landscape of online sports wagering in the United States.
You might like this article:FDA Approves Novocure’s Optune Pax®, Marking Major Breakthrough in Pancreatic Cancer Treatment
