The American Gaming Association (AGA) is urging the Biden administration to work with the gaming industry as the federal government continues its efforts to develop and implement a digital assets and cryptocurrency strategy, according to a letter submitted to the U.S. Department of the Treasury.
“Gaming is a highly regulated industry and that’s no different when it comes to digital assets,” Alex Costello, AGA’s vice president of government relations, told VIXIO GamblingCompliance on Monday (August 15).
Costello said the industry wants to “ensure that any federal policy considers gaming’s distinct regulatory obligations, so operators have the choice to offer digital asset payment options and feel confident in their ability to remain compliant in terms of KYC (know your customer) and AML protocols.”
In March, President Joe Biden issued the Digital Assets Executive Order, which called for the responsible development of new federal policies around cryptocurrency and blockchain technology.
The executive order allows the federal government to promote standards and best practices governing digital assets, including cryptocurrencies. It also allows more participation in the sector by U.S. companies while still maintaining a responsible and legal approach to issues surrounding anti-money laundering.
The Biden administration’s executive order also mentioned mitigating the illicit finance and national security risks posed by the misuse of digital assets, as well as protecting customers, investors and businesses.
In his letter dated August 8, AGA president Bill Miller wrote that he “respectfully requests that the U.S. government evaluate how any new frameworks or requirements would map onto the gaming industry.”
As many gaming companies and regulators are considering the use of digital assets, Miller requested “tailored requirements and guidance for the industry.”
“Complying with requirements such as anti-money laundering regulations for fiat currency has illustrated over time that the operations of the gaming industry raise unique questions that can necessitate tailored requirements and guidance for the industry,” he wrote.
As the industry has done with fiat currency, Miller wrote, the AGA remains a willing partner to assist the U.S. government to “fashion predictable and workable guidelines to govern the use of digital assets in the gaming industry.”
Miller’s letter was sent to Nellie Liang, undersecretary of domestic finance, along with Brian Nelson, undersecretary of terrorism and financial intelligence, at the Treasury Department, as well as to Jake Sullivan, national security advisor and assistant to President Biden.
The AGA recently has been aggressive in lobbying the federal government not only concerning digital assets but calling for a crackdown on illegal offshore sportsbooks. Miller’s letter also was released shortly after the AGA issued new guidance on AML practices, which included cryptocurrency guidelines.
Costello said the association is continuing to educate regulators as state-level policies are created and updated.
“The gaming industry is primarily regulated by state and tribal governments who best understand their communities and already have robust regulatory regimes in place. In fact, federal activity in the digital assets space has largely lagged behind the states; there are already state policies on cryptocurrencies and likely more to come.”
Costello added the AGA “has served as a resource for several states as they consider digital payments options on the gaming floor.”
Last month, Penn Entertainment’s Barstool Sportsbook became the first U.S. operator to offer cryptocurrencies as a payment method for customers exclusively in the states of Colorado and Virginia and only once digital currencies are first converted into U.S. dollars via an approved exchange platform.
Wyoming remains the only state that expressly recognizes crypto, digital, or virtual currencies as an approved payment method for online sports betting, but regulations in Colorado and Virginia and other states give gaming regulators the authority to permit payment methods beyond credit and debit cards or ACH payments.
Miller’s letter makes it clear that there is not a uniform view about the role that digital assets should play in the industry, a position Costello said is far from unique to the gaming industry.
“Like any part of the business, each operator will make their own decision on if and how to introduce digital assets to their product offering,” Costello said. “What we want to ensure is that any federal regulation considers gaming’s unique circumstances, so operators have the ability to offer digital asset payment options if they choose.”
Costello told VIXIO that it remains to be seen how “ubiquitous digital currency will become, but with gaming operations currently in 44 states, we have a vested interest in helping to shape how future financial instruments are regulated on a federal level.”
Looking into the future, Costello believes the gaming industry will continue to change with the times as new financial technologies become available.
“Financial fraud and cybercrimes are ever evolving so we must be hyper-vigilant in working with law enforcement and other stakeholders to ensure we are prepared for what comes next,” she said.