Home > Credit Score > Can Gambling Hurt Your Credit Score?

Comments 0 Comments

Loans can be pretty tricky to repay when you lose the money you borrowed in the first place. That’s why gambling with borrowed money is generally not a good idea. Still, people do it, and it could hurt more than just your bottom line. Your credit can take a hit if you’re not careful when gambling.

There are the seemingly obvious ways to avoid this, like not taking out a credit card cash advance or personal loan to gamble, because you may end up paying a ton of interest on a pool of money that may grow or disappear. The whole “disappearing” thing could make it really tricky to meet your debt obligations. But there are other ways gambling could get you into credit trouble.

Casino Credit

Given how risky it can be to gamble with borrowed money, the idea of “casino credit” may sound counterintuitive. Casino credit certainly exists, but it’s not credit in the sense that most people think of it, like credit cards or personal loans.

There are 23 commercial casino states, casino credit is not offered in all of them, and gambling regulations vary from state to state. That makes it tricky to give an overarching explanation of casino credit, but here’s the general idea:

Casino credit isn’t a loan from a gaming institution. It’s your money, but instead of withdrawing, say, $2,000 from your checking account for a trip to Las Vegas, you can apply for casino credit and avoid carrying wads of cash up and down the Strip.

You give the casino a slew of personal information — name, address, Social Security number, checking account — and you can get credit instruments (sometimes called markers) to use as cash when playing. In Nevada, casino credit applications state that credit instruments are identical to personal checks.

It’s like post-dating a check, borrowing money from yourself, using a check-cashing service — people describe it different ways, but the point is that it is not a loan, in the traditional sense. You’re using your money and putting off withdrawing it for several days (the terms vary but can be as much as 45 days, Smith said).

“Casinos aren’t in the ‘lending business,'” said Andrew Smith, director of research for the American Gaming Association. “First off, and importantly, interest is not charged as it is with credit cards.”

But when you apply for casino credit (the minimum in Nevada is $500, and there is no maximum), you give the casino permission to check your credit.

Casinos don’t furnish data to credit bureaus, but many outsource credit-checking services to outside companies, who may request credit reports on casino-credit applicants. What you need to know: It’s possible that applying for casino credit could result in an inquiry on your credit report, and inquiries can hurt your credit scores. You can see how inquiries are impacting your credit scores using the Credit Report Card, which will grade you on all the important credit scoring factors like inquiries and show you two of your credit scores for free.

Repaying Casino Credit

Depending on how much credit you apply (and are approved) for, you have a certain amount of time to repay the casino or cash in your markers. If you do not return to the casino to do so, the money is withdrawn from the checking account (because you gave them that information).

Now if you don’t have the money in your checking account to cover what the casino issued, you’ve got a problem.

“It would be the same as not paying off, not making good on your car payment,” Smith said, saying that’s at least true in Nevada and New Jersey. “Essentially the casino operator has a legal right to go after your funds.”

How something like this unfolds depends on which state the casino is in (the state-by-state differences are a common theme in the gaming industry), but you get the idea: An unpaid casino credit could lead to debt collection, which isn’t something anyone wants on his or her credit report.

It’s not quite the cinematic version of gambling debt, in which thugs threaten to break your legs unless you pay up, but it’s still a serious issue. You may be committing fraud if you knowingly apply for casino credit without sufficient funds in a personal checking account.

More on Credit Reports and Credit Scores:

Image: fergregory

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

Certain credit cards and other financial products mentioned in this and other articles on Credit.com News & Advice may also be offered through Credit.com product pages, and Credit.com will be compensated if our users apply for and ultimately sign up for any of these cards or products. However, this relationship does not result in any preferential editorial treatment.

Hello, Reader!

Thanks for checking out Credit.com. We hope you find the site and the journalism we produce useful. We wanted to take some time to tell you a bit about ourselves.

Our People

The Credit.com editorial team is staffed by a team of editors and reporters, each with many years of financial reporting experience. We’ve worked for places like the New York Times, American Banker, Frontline, TheStreet.com, Business Insider, ABC News, NBC News, CNBC and many others. We also employ a few freelancers and more than 50 contributors (these are typically subject matter experts from the worlds of finance, academia, politics, business and elsewhere).

Our Reporting

We take great pains to ensure that the articles, video and graphics you see on Credit.com are thoroughly reported and fact-checked. Each story is read by two separate editors, and we adhere to the highest editorial standards. We’re not perfect, however, and if you see something that you think is wrong, please email us at editorial team [at] credit [dot] com,

The Credit.com editorial team is committed to providing our readers and viewers with sound, well-reported and understandable information designed to inform and empower. We won’t tell you what to do. We will, however, do our best to explain the consequences of various actions, thereby arming you with the information you need to make decisions that are in your best interests. We also write about things relating to money and finance we think are interesting and want to share.

In addition to appearing on Credit.com, our articles are syndicated to dozens of other news sites. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. This network operates similarly to the Associated Press or Reuters, except we focus almost exclusively on issues relating to personal finance. These are not advertorial or paid placements, rather we provide these articles to our partners in most cases for free. These relationships create more awareness of Credit.com in general and they result in more traffic to us as well.

Our Business Model

Credit.com’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, Credit.com maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, Credit.com will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, Credit.com won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or Credit.com. You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and Credit.com wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.

Our Owners

Credit.com is owned by Progrexion Holdings Inc. which is the owner and administrator of a number of business related to credit and credit repair, including CreditRepair.com, and eFolks. In addition, Progrexion also provides services to Lexington Law Firm as a third party provider. Despite being owned by Progrexion, it is not the role of the Credit.com editorial team to advocate the use of the company’s other services. In articles, reporters may mention credit repair as an option, for example, but we’ll also be sure to note the various alternatives to that service. Furthermore, you may see ads for credit repair services on Credit.com, but the editorial team isn’t responsible for the creation or implementation of those ads, anymore than reporters for the New York Times or Washington Post are responsible for the ads on their sites.

Your Stories

Lastly, much of what we do is informed by our own experiences as well as the experiences of our readers. We want to tell your stories if you’re interested in sharing them. Please email us at story ideas [at] credit [dot] com with ideas or visit us on Facebook or Twitter.

Thanks for stopping by.

- The Credit.com Editorial Team