DETROIT–After online betting became legal in this state in January, some Michigan banks and credit unions have now moved to cut off access to accounts for such purposes, according to a new report.
Michigan Legacy Credit Union CEO Carma Peters told Crain’s Detroit she was alarmed by the volume of online bets placed by her institution’s members within the first weeks of legal online betting in Michigan.
In less than two months since the Jan. 22 launch of online betting in the state, Peters told the publication 187 members made more than 1,200 transactions with online betting sites totaling $82,715.
While that’s just 1% of MLCU’s 20,000-person membership, many of those placing bets are in the low-income bracket, and Peters told Crain’s Detroit she quickly sensed the risks it posed for members and the credit union itself.
“They’re not calling their gaming apps; they’re calling us,” Peters was quoted as saying, adding that gaming merchants are not implementing spending floor limits. “From a reputation standpoint, this is not good for us. While we didn't do it, they're calling us, and they're angry."
Effective March 2, the credit union cut off services for online betting, including legal sites, Crain’s Detroit reported.
"This could truly create a financial disaster for members," Peters told Crain’s Detroit. "We just thought the potential risk was way too much, and it wasn't worth it. How many people are going to want to pay on a gambling debt?"
Others Not Taking the Bet
According to Crain’s Detroit, other institutions in Michigan are also not willing to take the bet, including Comerica Bank, which notified customers trying to use credit and debit cards or accounts to gamble that "attempting to use these sites" may result in accounts being temporarily disabled.
Other large banks blocking online gaming in Michigan and elsewhere include JPMorgan Chase, Huntington Bank and Capital One, while several of the large credit card issuers have followed suit, Crain’s Detroit added.
Peters told the publication Michigan Legacy could reverse its policy toward online gambling, but she thinks the move benefits both the business and members.
"It makes me question the amount of marketing" by the online gaming companies, she told Crain’s Detroit. "It's an early onset to get people hooked. They're plugging that card into these apps, and they're playing, and they're playing and they're playing."