PSA: Online Sports Betting Is Considered A Cash Advance

Just a quick PSA, courtesy of our friends over at r/churning:

Online sports betting transactions with sites like FanDuel are typically considered a cash advance with most (all?) credit card issuers, such as Chase, Amex, Barclay, etc. This is especially relevant now that online sports betting is becoming legal in more states, having recently become legal in New York.

Apparently, fantasy leagues are typically not considered a cash advance, per this Yahoo article, but betting on a particular game is considered a cash advance.

Update: Also read through the comments as it appears there are some sites and some cards and some types of bets that do count as an ordinary purchase.

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Matt D.
Matt D. (@guest_1318750)
January 20, 2022 12:47

If you are playing DFS (daily fantasy sports) on sites such as draftkings and fanduel you can use a CC with no fees, but if you are depositing on the sportsbook side of things you will get dinged with fees! I believe yahoo deals mainly with paypal. These sites treat your balance differently, such as if you play on the fantasy side and win then those funds are available on the sportsbook side of things as well.

You can use paypal on the sportsbooks only if you have a bank account linked to it not a credit card, but this can vary state to state – just like MMJ they need to make this legal nationwide already.

Lucas A
Lucas A (@guest_1319155)
January 20, 2022 21:39

Okay fine, I’ll give up my GOAT: yahoo daily fantasy. $1,000 credit card deposit limit per 30 days. After that, you can get approved for $2,000/day deposits. No credit card processing fee. Withdraw to PayPal tax free (wait for all deposits to post before withdrawing).

Posts as digital games. Muwhahahaha

Lucas A
Lucas A (@guest_1319177)
January 20, 2022 22:23

*fee free, tax is owed on this kind of circular transaction

Michael
Michael (@guest_1319224)
January 21, 2022 00:06

Is it taxable if you just fund and withdraw without betting? If you can show you didn’t actually win anything it doesn’t seem like there’s anything to tax.

Lucas A
Lucas A (@guest_1319263)
January 21, 2022 01:43

Yes, when funding and withdrawing with no gambling, tax would be owed on the cashback/miles since this is pure manufactured spend that’s getting converted back to cash. The typical tax-free rebate exemption doesn’t apply to it.
https://www.wsj.com/articles/he-got-300-000-from-credit-card-rewards-the-irs-said-it-was-taxable-income-11615125601
https://www.reddit.com/r/churning/comments/52qr9q/comment/d7mtwqw/?utm_source=share&utm_medium=web2x&context=3

Slowbrake
Slowbrake (@guest_1319318)
January 21, 2022 08:37

very generous, thank you

Numba1
Numba1 (@guest_1323428)
January 30, 2022 10:09

This doesn’t work anymore. Just funded $1k to Yahoo Daily Fantasy from my Hyatt credit card and then attempted to withdraw $900 of it to PayPal a few days later after transaction posted to my credit card account. Transaction was canceled and Yahoo just refunded my CC instead.

Dave
Dave (@guest_1325108)
February 2, 2022 11:46

Yep. I tried the same with the same result. No longer works like it should. Bummer.

Lucas A
Lucas A (@guest_1326065)
February 3, 2022 21:44

edit: sorry folks, it had worked for a bit but now my withdrawals are credited back as a credit card refund. I am bummed and sorry if I wasted anyone’s time

Mark
Mark (@guest_1319138)
January 20, 2022 21:16

There is a little more risk with sports books, but if arbed correctly, this is right up most of the heavy churners alleys and likely more profitable- at least at the signup.

Pairs nice to go to the different states and utilize the cc Pts too. Follow the Reddit Sportsbook thread. Similar to churning on Reddit.

I find myself putting credit cards 💳 n the back burner messing with Sportsbook as it is more profitable for me right now.

TB
TB (@guest_1319054)
January 20, 2022 18:33

Gadget - Bank Bonus Geek won’t matter for you cuz you can use the thousands in referral money

Gadget - Bank Bonus Geek
Gadget - Bank Bonus Geek (@guest_1319102)
January 20, 2022 19:57
  TB

Thank you, TB! Feel free to link to as many of my comments as possible!

MikeTheCreator
MikeTheCreator (@guest_1318855)
January 20, 2022 14:14

THANKS DOC

Churning
Churning (@guest_1318749)
January 20, 2022 12:45

I’ve deposited tens of thousands of dollars on various daily fantasy sports betting sites across various cards, and never once been charged a cash advance fee.

Superman
Superman (@guest_1318737)
January 20, 2022 12:35

Only losers pay CA? Don’t pending transactions get reversed for winners? I’m more interested in those so called free play/risk free SUB offers. When will we see that post?

FreeFreeFree
FreeFreeFree (@guest_1318758)
January 20, 2022 12:52

Can be profitable if one can understand the real value of the bonuses/free bets.

‘Risk Free’ is basically a marketing lie though.

Most (not all) sites give you a ‘free bet’ if you lose your first bet. If that free bet is $500, it’s only worth about half of that since the free bet will statistically hit about 50% of the time as the oddsmakers are generally good at setting the spreads bet. Bet at -110 odds and the return is $227.

So upon a loss of that $500 initial ‘risk free’ bet, one gets something worth about $227, so they’ve lost $273. Hardly risk free. But certainly reduced risk… Expected return is a net positive so with many bets, it can be fruitful.

I’d suggest just making a separate bank account for online dealings. The sites usually will only send money to a bank account you have deposited from.

B
B (@guest_1318774)
January 20, 2022 13:09

Depends, caesar was offering 100% risk free bets matching to $3000, that was stupid. People can just use the 1st $3000 on something, say -100, if you win, great you make $3000, if you lose, another $3000 risk free bet. Now if you are risk averse, bet on something sure, warriors over pistons and wait till the last possible moment end of Q3 to bet, you get -10000 odds but now you have $3000 in cash and can be withdrawn.

It’s basically a free call option

David Muz
David Muz (@guest_1318870)
January 20, 2022 14:30
  B

I’m up over $12,000 from churning those promos this past week. Serious money! https://basictravelcouple.com/sportsbooks-are-live-in-ny-12000-profit/

MB
MB (@guest_1318775)
January 20, 2022 13:10

You can bet the other side at a different sportsbook, and lock in a profit of about ~80%. You’re losing EV, but eliminating variance.

I’ve made an obscene amount of money churning free bets, SUBs, and promotions, and haven’t done an ounce of “gambling” in the process.

B
B (@guest_1318911)
January 20, 2022 15:12
  MB

How does that work lol you need to literally a) find the arbitrage b) execute quickly c) bet different notional amount d) bet large notional amount to be worthwhile

Take a site giving A > B at +200, so profit $100 if A wins assuming you bet $50, to hedge on the other side, you bet B>A at -100, so you would need to bet $200 on the other site to be broke even

What is the guaranteed strategy profit here? You can’t be shorting your bet lol. You are simply offsetting your wins/losses, but there is still risk,

It is similar to saying Big Mac costs more in rich areas than poor areas, but no easy way to arbitrage here

MB
MB (@guest_1318942)
January 20, 2022 15:39
  B

I’m not referring to arbitrage at all, I’m only referring to promotions. A very common type is: “Bet this spread up to $50, and if you win, you get a freebet equal to your wager.”

With the expectation that you can convert that freebet at an 80% value (which is usually the going rate), you hedge on another book. $50 on Book A, and $70 on Book B. If the latter wins you lock in a $20 profit. If the former wins, you’ve paid $20 for a $50 free bet, which you then convert into a $40 win using the similar hedging process, for a $20 net profit.

B
B (@guest_1318957)
January 20, 2022 15:50
  MB

Well yeah but how do you make lots of money on this strategy, usually these promos come with bonus limits

MB
MB (@guest_1318977)
January 20, 2022 16:27
  B

Most of these promos have a guaranteed EV of $15-25, but occasionally they’re as high as $100-150. Caesars will occasionally run 50% profit boosts with a $200 limit, and they’re eminently exploitable. Then keeping in mind the fact that there are 5-10 sportsbooks doing promos like this in most jurisdictions, and it’s not at all difficult to make a few hundred a week.

AAAAA
AAAAA (@guest_1318861)
January 20, 2022 14:23

You fund the account and then use the funds in the account to make the bets – at least on every site I’ve ever used – the bets are not charged/charged back directly to the card.

It makes sense that it would be a CA because otherwise, you could fund the account with a credit card and then withdraw all the money through a different method such as check, and essentially get a free CA.

bob
bob (@guest_1318733)
January 20, 2022 12:32

huh, the one time i did it (BetDSI) Hilton Amex went thru no problem. IIRC, tho, Chase didn’t even go thru. coded as “fraud”

Sandy
Sandy (@guest_1318702)
January 20, 2022 12:08

Also If it’s overseas based they’ll charge a foreign exchange fee LOL

Brick
Brick (@guest_1318700)
January 20, 2022 12:05

In Michigan, I have found that Discover still codes as a purchase for any site that accepts it (often need to sign up for their Play+ account)

Jonny
Jonny (@guest_1318699)
January 20, 2022 12:05

I use Paypal for FanDuel and DraftKings sportsbook and have never encountered a cash advance fee.

Steve
Steve (@guest_1318705)
January 20, 2022 12:10

Late to the party, but can you then use PayPal to deposit money into FanDuel and then withdraw it without making a bet (or similar) and score the points?

Chris
Chris (@guest_1318712)
January 20, 2022 12:15

Have to hold in account for 3 months

B
B (@guest_1318718)
January 20, 2022 12:18

No… it’s like returning an item, the spend will be removed

Kenny M.
Kenny M. (@guest_1318766)
January 20, 2022 12:57
  B

In addition, some sports bet platforms require a 30 days hold with no action. They’re not too keen on releasing funds which haven’t been “won.”

Matt D.
Matt D. (@guest_1318919)
January 20, 2022 15:23

Sportsbooks are run by the casinos such at BetMGM, Caesars, and other online betting platforms. Draftkings and Fanduel are kind of confusing because they offer fantasy sports, but also offer sportsbetting on a linked site that is separate from the original.

Fantasy was legal before sportsbetting because it was deemed a ‘game of skill’ due to loophole in some online legislation that put an end to legal online poker back in the day. Although online sportsbetting has been around for a while they were based on offshore sites that didn’t operate in the U.S. – it has just recently became legal in multiple states because the government gets to take their cut, so the casinos are raking it in now! So they are technically different games, but the same risking money to win money. Fantasy is contest based vs. other fantasy players…sportsbooks are you against the house. They both charge a rake or vig on paid contests or bets.

Jonny
Jonny (@guest_1318997)
January 20, 2022 16:39

It’s been my experience that users on the sites operating both a sportsbook and fantasy sports site (e.g., FanDuel, DraftKings) share a “common fund” through both interfaces (so it wouldn’t really matter which one you deposited money into).

I’ve been using my Chase Freedom Unlimited via PayPal for as long as I can remember to fund my sportsbook and fantasy account. I do it solely to collect Chase UR. It’s only a matter of time before it’s a cash advance across the board. Honestly, I’m surprised it’s taken this long.

Jeff
Jeff (@guest_1319768)
January 22, 2022 08:54

CC linked to PPK?