After a disastrous decline in 2022, the cryptocurrency market is rebounding this year, but U.S. casinos and gaming operators remain hesitant to embrace crypto and other alternative payments until federal regulations are adopted.
Last year’s bankruptcy of FTX and the arrest of its founder, Sam Bankman-Fried, combined with surging inflation to create a Crypto Winter, a term to describe a period of prolonged pricing weakness.
But Bitcoin is up more than 80 percent this year and the long-term outlook for crypto is improving.
Still, Jonathan Michaels, a senior vice president for strategic development and government affairs at Sightline Payments, said gaming regulators would be wise to take their time before promulgating any rules on crypto payments in casinos.
“It’s a complicated space. I think [regulators will] get there eventually, but I think it’s better that it’s going to be done the right way than to just do it quickly,” Michaels told VIXIO in a phone interview.
The Nevada Gaming Control Board (NGCB), in a statement on Tuesday (June 13), said cryptocurrency can be used to purchase goods and services at a licensed Nevada gaming property.
“However, cryptocurrency cannot be used to place a wager, fund a wagering account, or in any way be associated with gaming activity in Nevada,” the NGCB said.
Indeed, cryptocurrency payments for wagers are not being legally offered anywhere in the United States.
Wyoming’s sports-betting law expressly allows licensed operators, including BetMGM and DraftKings, to accept “digital, crypto and virtual currencies,” so long as those payment methods can be converted to cash.
In June 2022, gaming regulators in Colorado, as well as Virginia, approved Barstool Sportsbook to accept deposits made in popular cryptocurrencies, but only after they are first converted into U.S. dollars via an approved crypto exchange platform.
Rahul Sood, CEO and co-founder of Irreverent Labs and the former CEO of Entain-owned Unikrn, advocates a more aggressive approach on cryptocurrency by regulators.
“Unless U.S. regulators start helping operators and exchanges and crypto platforms by guiding them with reasonable regulation and rules, the U.S. is going to be left behind. Regulation by enforcement is not good for anyone, anywhere,” Sood told VIXIO in an email.
Sood cited Stake.com, the booming offshore online casino where gamblers typically deposit and withdraw cryptocurrencies to and from their betting accounts.
“I am not advocating for skirting regulations. I’m just saying, ‘Open your eyes and look at what the market wants and see if there’s a way you can help facilitate making it happen in a responsible way,’” Sood said.
Michaels of Sightline said the crypto market for regulated gaming operators is likely to remain dormant in the United States until Congress establishes a federal regulatory framework, and that could take years.
But Alex Costello, vice president for government relations at the American Gaming Association, said the Crypto Winter has drawn attention from Congress and the White House.
“Those collapses really highlighted the need to create a federal [regulatory] structure, and so I think [the Crypto Winter] has actually been helpful in bringing more people to the table and elevating some of those discussions,” Costello said.
As reported on our sister platform, VIXIO GamblingCompliance.