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Buy lottery tickets with a credit card? Probably not

A web of state laws, retailers, card policies can all ban the practice

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Buy lottery tickets with a credit card? Maybe
Buy lottery tickets with a credit card? Maybe

While credit cards are used to buy everything from human skeletons to celebrity encounters these days, the winner of this week's $1.5 billion lottery will likely purchase a paper ticket, in person, with cash.

Lottery ticket sales are banned by law in many states and even where you can buy them, credit cards are often forbidden as a way to buy them, either by state law or by the banks themselves. Just 17 states allow lottery purchases with credit cards. (See chart: "State rules for buying lottery tickets with a credit card").

Want to buy a Powerball ticket online? Odds are you can't -- legally, anyway. According to the official Powerball website, 42 out of the 44 states in the Powerball network, Washington, D.C. and the U.S. Virgin Islands all forbid online Powerball ticket sales on official state lottery sites, Those that do permit such transactions -- Illinois and Georgia -- still require purchasers to be within same-state boundaries. If your state isn't in the Powerball network, you might have to travel to a participating state to make a legal ticket purchase.

State laws set the rules, retailers have sway
Since gambling is regulated by state law, the regulations in your state determine whether you can buy lottery tickets with plastic. In Connecticut, for example, you cannot buy tickets with a credit card. But you can use a gift card or debit card -- unless the specific retailer prohibits using debit. In Tennessee, however, lottery tickets may only be bought with cash.

Other states, including Pennsylvania and Kansas, leave it up to individual retailers to decide which forms of payment to accept.

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Fears of gambling addiction
The main reason for prohibiting the use of credit cards is that compulsive gamblers could accumulate unmanageable debt. Credit counselors warn that this is primarily an issue for people with poor financial self-control. "If you don't have enough cash to buy a lottery ticket, you shouldn't be paying with a credit card," says Bruce McClary, spokesman for the National Foundation for Credit Counseling. "Irresponsible use of credit can lead to unmanageable debt and the serious consequences that follow. Whether it is fueled by gambling or other factors, overspending is a serious problem that deserves immediate attention."

Avoid taking cash out of an ATM with your credit card, too.

"If a machine doesn't accept credit cards, their next instinct might be to go to an ATM and get a cash advance with their credit card," said McClary. Because of the high APRs typically associated with credit card cash advance transactions, "you are actually ending up costing yourself more by doing that. It's a very dangerous move to consider getting a cash advance to pay for a lottery ticket."

Use caution with online reseller sites
Some businesses are seizing the opportunity to target lottery players who want to use plastic, but may not have that option in their area. Use them with caution when attempting to buy lottery tickets online.

Third-party lottery sale websites such Nicosia, Cyprus-based CongaLotto.com allow consumers to purchase lottery tickets online, with credit cards as one of the payment options. They'll send someone to buy the ticket on your behalf and then hold them. You pay a premium for the service, and you have to trust they'll pay off.

The Powerball site issues this warning: "There are no regulations of websites that claim to sell tickets or to sell you a 'service' to buy and hold tickets for you. Many lotteries believe that they would violate state and federal laws if they paid on those tickets purchased (if actually purchased) by an unlicensed reseller."

Purchase rules vary by state 
However, only state lottery organizations and licensed retailers can legally sell lottery tickets in the U.S., and no one can sell lottery tickets across a state border. So, if you are in Alabama trying to buy a ticket online for a lottery in another state, think again. There's no guarantee your purchase -- and even winnings, if your numbers match up -- is legitimate. 

For other lottery games, some states have begun offering their own online lotto ticket sales to state residents. In 2012, Illinois became the first state to allow online purchases of individual lottery tickets. Since then, many other states, including Minnesota, Georgia and Kentucky, have followed suit. The Kentucky Lottery even offers a mobile app for on-the-go gamblers.

Cards may ban sales, too
In many cases, though, the decision about whether to accept credit card lies ultimately with lottery ticket retailers and even credit card issuers. Several of the states that allow credit card payment for lottery tickets ultimately leave it up to retailers to determine acceptable payment methods. For example, Kansas and Louisiana (see below).

Plus, even in states where credit card purchases are allowed by the government and retailers, your card company or issuing bank may have rules of its own. American Express prohibits the use of its cards for gambling services, according to a representative. 

Visa and MasterCard declined to comment on their policies regarding lottery ticket purchases, but recommend consumers ask their credit card's issuing bank for more specific lottery purchase information.

"If the state and retailer allows it, it's still up to the bank to determine whether they can use their card," explained Steve Kenneally, vice president of American Bankers Association Center for Payments and Cyber Security. Banks have the choice to block lottery transaction that may be lawful, or viewed as too much of a risk or liability by the financial institution. Read your specific cardholder agreement to see if your bank-issued credit card might do this.

"If there is a policy that you cannot use your card for wagering, they will block any transactions that come in noted as such," Kenneally added. "It's perfectly legal to block it. The action is actually called 'overblocking.'"

STATE RULES FOR BUYING LOTTERY TICKETS WITH CREDIT CARDS

State

Credit cards accepted for lottery purchases?

Alabama No. Lottery not allowed in state
Alaska No. No in-state lottery
Arizona Yes, and debit
Arkansas No, cash only
California Yes, but only at designated gas pumps with lottery ticket sale options
Colorado No, but cash, debit, check or money order OK
Connecticut No, and debit card at retailers discretion
Delaware Yes
Florida No
Georgia No
Hawaii No. Lottery not allowed in state
Idaho Yes, and debit
Illinois Yes
Indiana Yes, and debit
Iowa No, and other payment methods up to retailer
Kansas Yes, but depends on retailer
Kentucky No. Debit OK
Louisiana Yes, but depends on retailer
Maine Yes
Maryland No,  but debit, check and money orders OK
Massachusetts No
Michigan Yes
Minnesota Yes, but depends on retailer
Mississippi No. Lottery not allowed in state
Missouri No, but debit OK
Montana No, not even online
Nebraska Yes, but depends on retailer

Nevada

No. No in-state lottery

New Hampshire

No, not online or in person

New Jersey

No, but debit OK

New Mexico

No, cash or check only

New York

Yes, but depends on retailer

North Carolina

No, but debit OK

North Dakota

No, and debit depends on retailer

Ohio

Yes

Oklahoma

No, and no checks or debit either

Oregon

Yes, and debit

Pennsylvania

Yes, but depends on retailer

Rhode Island

Yes

South Carolina

No, cash only

South Dakota

Yes, but depends on the retailer 

Tennessee

No, cash only

Texas

No, but debit OK

Utah

No. Lottery not allowed in state

Vermont

Yes

Virginia No, but debit and pre-paid gift cards OK
Washington Yes, but depends on retailer
Washington, D.C. No, cash only
West Virginia No
Wisconsin No, cash only
Wyoming No, and no debit either
Source: CreditCards.com research, January 2016

See related: States limit welfare, food stamp debit cards to ban 'sin' purchases, 10 things you can't (easily) buy with credit cards, Controvery erupts over credit card payments for guns

Updated: January 12, 2016


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Updated: 02-12-2016


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