CFPB Shutdown Adds Layer of Complexity for Problem Gamblers in America

Consumer Financial Protection Bureau Gambling

February 11, 2025 | By Kindbridge

As of February 10, 2025, the U.S. presidential administration has ordered the shutdown of the Consumer Financial Protection Bureau (CFPB). Commentary on the political action is far beyond the scope of what we do at Kindbridge Behavioral Health. There may or may not be merit to the decision, and the shutdown may be temporary as CFPB funding may be instead be scaled back. Again, this platform is not intended for such matters. What we do analyze, however, is how any sociopolitical movement in the United States can reverberate into the mental health and wellness of Americans, especially as it applies to one of our key specializations – problem gambling. Does the recent news regarding the CFPB have any bearing on the gambling public? Let’s review.

How the Shutdown (or scale back) of the Consumer Financial Protection Bureau Adds Another Potential Burden to Problem Gamblers of America

CFPB’s Role in Monitoring Gambling Operations

The CFPB’s involvement in protecting the gambling public has been distant at best. That being said, there are gambling and sports betting references in their list of consumer reporting companies and more recently they have provided some very valuable insight.

Just over one month prior to their recent work stoppage, the CFPB released a report on a spike in credit card cash advance fees that have coincided with the legalization of sports betting in the United States. For the uninitiated, credit card cash advances are defined as withdrawals of cash from an individual’s credit card account. It’s essentially borrowing money against one’s credit card to put cash in their pocket. Credit card cash advances are considered by issuers to be high-risk given that the borrower is considered to not be very “liquid”. Consequently, interest rates tend to be much higher than a holder’s standard credit card interest rate, typically in the range of about 23% to 30%. In some cases a flat rate is applied to credit card cash advances. The December 16, 2024, CFPB report unveiled the following:

Credit Card Transactions Used in Sports Betting Treated as Cash Advances

After receiving complaints against credit card companies from sports bettors in newly regulated (for sports betting) U.S. states, the CFPB analyzed credit card company cash advance fees associated with transactions made on regulated gambling platforms. They found that on average, issuers charged $10 or more in “cash advance” fees for each sports gambling transaction made with a credit card. In other words, someone making a seemingly small $10 bet on Monday night football using their credit card would effectively be doubling their wager to $20 ($10 bet + $10 cash advance fee) but without doubling their payout if they actually won the wager.

Credit Card Issuers not Transparent About Fees Associated with Sports Betting

The recent CFPB report indicated that consumer complaints have provided evidence that a number of cardholders have been unpleasantly surprised by cash advance fees on sports betting transactions. Cardholders cite a lack of transparency from both credit card issuers and gambling operators as reasons for their complaints.

These Cash Advances Add Up

Research shows that among bettors aged between 18-24 (the bulk of problem gamblers in America) the vast majority of wagers (nearly 83%) are between $10 and $50. So a cash advance fee becomes very significant for the nation’s most vulnerable sports bettor:

“In the weeks following the initial cash advance, the costs will continue to grow: transactions begin accruing interest at a higher cash advance interest rate from the date of the transaction. Say for example, someone had a $400 cash advance balance for one month – at 30% APR, the norm for cash advance rates in the agreements above – the cardholder would incur $10 in interest on top of a $20 cash advance fee (equivalent to an annual interest rate of 90%) […] The incremental interest of carrying a cash advance balance for smaller transactions may only equal a few cents, but the final finance charge could be higher, as many issuers have a “minimum interest charge” ranging from $0.50 to over $2. This charge when combined with the minimum cash advance fee can make smaller transactions – on both sports wagers and other cash advance transactions – comparatively costly.” (CFPB)

Gambling debt is already an epidemic in the United States. 20% of male sports bettors allocate nearly quarter of their paycheck to the activity, with the same percentage of them being in consistent debt. When you pile interest accruing fees to gambling losses the financial toll will only worsen for those who struggle to control their gambling behavior. You can reference the entire CFPB report if you desire further insight, but allow us to conclude with another quote which is now quite cryptic in light of recent developments:

“The CFPB will continue to examine how credit card issuers communicate to borrowers on the types of purchases that will incur hefty cash advance fees. The CFPB will also seek to better understand how cash advances for online sports betting affect a consumer’s credit profile.”

It seems that the CFPB will not be able to fulfill this promise.

American Gamblers Left to Their Own Devices?

The CFPB is by no means a primary watchdog over gambling industry practices, but as this most recent report indicates, they have served a purpose. In the growing battle against problematic gambling behavior every cog in the defensive line counts.

While the current (maybe permanent) CFPB shutdown adds another layer of complexity to the problem gambling crisis, citizens are not on their own. As the nation’s preeminent problem gambling support provider, Kindbridge encourages you to reference the following debt-related resources as needed:

Further, we work with gambling operators to ensure that the sports betting public has greater transparency regarding access to problem gambling support services. For instance, FanDuel (view more), DraftKings (view more), and BetMGM (view more) have taken steps to connect players who struggle with mental and behavioral health to Kindbridge counselors.

Lastly, and most importantly, Kindbridge counselors remain on standby to provide support to problem gamblers across the country. We offer virtual online and telehealth services that will protect you as an individual (and consumer). Reach out via the contacts provided below to connect to a counselor today.