Do Banks Care if You Gamble?

Gambling is a timeless habit for millions of people around the world. There are many forms of gambling: casino games, sports, lotteries, bingos, etc. Many countries have legalized the activity, and gambling expenses are detailed on banking statements and receipts. Why would banks care about your gambling habits? Keep reading and find out.

About Gambling Habits

Where gambling is legalized, you shouldn’t worry about having your habits exposed to a potential lender or other financial institution. It’s important to stress that lenders aren’t worried about how often you gamble. 

However, financial institutions analyze your ability to control your overall expenditure before considering you for a mortgage scheme, for instance. It means they’ll look for things like how much you earn per month, how much you spend on gambling, how often, and where.

The gambling habit itself isn’t a problem, but lenders are always concerned about the problem of gambling. After all, no financial institution would like to approve a mortgage for some who gambles compulsively. As long as the amount gambled monthly doesn’t jeopardize essential expenditures, banks don’t worry about it. 

Improving Your Score

Gambling expenses can only affect your credit score indirectly. Still, if you think banks might frown upon your gambling habits, it’s time to stop. Reducing the frequency and amount of your bets can help you improve your credit figures. 

Anyway, it’ll only affect your score when your losses become critically high, to the point you’re no longer able to repay your debts. Your score declines if you use payday credits to top up your bankroll.

Most online casinos have sections dedicated to responsible gambling and offer several tools and channels for support. These casinos also allow users to limit their monthly expenditures and even self-exclusion tools. When gambling becomes a compulsion, it’s advisable to seek professional help. 

About Taxes

Depending on where you live, your gambling winnings are liable to taxation and must be detailed on your annual tax return. Likewise, your losses must be stated and are possibly deductible if your deductions are itemized. 

If you’re lucky enough to score a big win on a legalized online casino, this institution will retain 24% of it and pay it to the IRS. The institution must provide you with a copy of the IRS Form W-2G, where the transaction was recorded. 

Not all the games are liable to the same taxation, though. Games like roulette, craps, and blackjack are considered games of skill instead of chance. Online casinos rarely detail how much you started with at each game. Nevertheless, you still must report your winnings to the IRS. 

KYC and AML

Online casinos, banks, and other financial institutions constantly fight against money laundering, tax evasion, and other financial crimes. That’s why they must abide by strict protocols, such as Know Your Customer (KYC) and Anti-Money Laundering (AML) policies. KYC prevents fraud and underage gambling, among other crimes. 

Private Affairs

Banks are a crucial part of any legalized and transparent gambling environment. They keep track of income and losses and help prevent financial crimes. Indulging in a few spins and poker hands now and then won’t affect your credit score. However, when you gamble compulsively, it’s likely to affect other areas of your life, including the ability to repay your debts, and that’s why financial institutions refrain from lending money to compulsive gamblers.