For some, gambling provides a unique form of excitement and thrills. The act of risking something of value to gain even greater value activates the reward center in our brain. But part of that excitement comes from the potential for dangerous consequences, and gambling too frequently can spiral into a destructive habit leading to significant financial troubles, including bankruptcy. 

Gambling bankruptcy is an unfortunate reality for many individuals every year in the United States. This article explores the options available for those facing gambling-related bankruptcy, discharging gambling debts through bankruptcy, plus resources and treatment options available to help with gambling addiction.

Can gambling debts be discharged through bankruptcy?

In the past, prior to widespread legalized gambling and online sports betting, the answer to this question was more complex. While eligibility for the discharge of gambling debts through bankruptcy still depends on several factors, including the type of bankruptcy filed and the circumstances surrounding the debts, courts now frequently allow these debts to be discharged. 

Under U.S. bankruptcy law, gambling debts – including debt charged on your credit cards, loans, and debt incurred from casinos – can be discharged in bankruptcy like any other unsecured debt, such as credit card debt or medical bills. This means that in many cases gambling debts can be discharged through bankruptcy. However, it's important to note that if the bankruptcy court determines that the debts were incurred through fraudulent behavior or under false pretenses, these debts may not be discharged.

Individuals filing for bankruptcy due to gambling debts must demonstrate that they did not incur these debts with the intent to defraud creditors. The court will examine the debtor's gambling history, the timing of the debts, and the debtor's overall financial behavior to make this determination.

Gambling bankruptcy resources & addiction treatment

Facing bankruptcy due to gambling debts can be overwhelming, but there are resources available to help individuals navigate this challenging time. Birches Health provides around-the-clock, flexible gambling addiction telehealth treatment designed to meet the unique needs of each individual seeking help. Their approach combines therapy, support and resources to deliver well-rounded treatment from the comfort of home.

Services Offered by Birches Health

Individual Therapy Sessions: Birches extends personalized one-on-one therapy with licensed professionals specialized in Gambling Addiction care. These sessions are tailored to address the specific needs and circumstances of each individual, offering a supportive environment to work through gambling-related issues.

Virtual Group Therapy: In addition to individual sessions, Birches offers virtual group therapy sessions. These sessions provide peer support and shared experiences, allowing individuals to connect with others facing similar challenges.

Support Materials: Birches provides a wealth of materials, including articles, videos and guides on Gambling Disorder and recovery. These resources offer insights and tools to help individuals understand their addiction and develop strategies for recovery.

Self-Assessment and Support Tools: Birches offers self-assessment quizzes to help individuals evaluate their gambling habits and determine the need for professional help. Additionally, they provide coping strategies and relapse prevention techniques as part of their comprehensive care approach.

How to get started with Birches:

For immediate assistance, you can call 833-483-3838 or email hello@bircheshealth.com to get in contact with the Birches team right away.

How common is bankruptcy from gambling?

Bankruptcy due to gambling debts is more common than one might think. Financial counselors and bankruptcy attorneys frequently encounter cases where gambling debts contribute to the overall financial distress leading to bankruptcy. Nine years before the repeal of PASPA (Professional and Amateur Sports Protection Act) in 2018, the Gambling Impact and Behavior Study found that 19.2% of pathological gamblers had filed bankruptcy. Although new research is needed given the outdated nature of this study, it’s a notable point of context for past frequency. 

Now, with the combination of easy access to gambling, especially the rise of online betting platforms, the addictive nature of gambling can quickly lead to significant financial problems. When individuals use credit cards, loans or other forms of credit to finance their gambling habits, they can accumulate debts rapidly, making it difficult to keep up with payments and lead to the possibility of bankruptcy. While precise statistics range, according to the U.S. Bankruptcy Court, some other studies report that 26% of Problem Gamblers file for bankruptcy

How to assess potential at-risk problem gambling behaviors

Identifying at-risk gambling behaviors early can help prevent financial ruin and the need for bankruptcy. Some signs of Problem Gambling include:

  • Chasing Losses: Continuously gambling to recover lost money.

  • Increasing Bets: Placing increasingly larger bets over time to achieve the same thrill.

  • Borrowing Money to Gamble: Taking out loans or using credit to fund gambling activities.

  • Neglecting Responsibilities: Ignoring work, family or social obligations due to gambling.

  • Hiding Gambling Activities: Concealing the extent of gambling from loved ones.

Recognizing these behaviors and seeking help early can make a significant difference in preventing severe financial consequences.


Sources: