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Cryptocurrency deposits were recently permitted for use in online sports betting in Virginia and Colorado, which is big news for people who enjoy some gambling entertainment and prefer to use crypto wallets for their transactions.
However, as iGamingNJ reports, the State of New Jersey has no plans to integrate crypto payments in the world of gambling and is still advising caution when it comes to the combination of cryptocurrency and gambling in the US market. Why’s that? What is the current state of crypto in the world of gambling?
Crypto Making Waves in the Gambling Industry
Penn National's Barstool Sportsbook made history in 2022 when it became the first U.S. operator to accept cryptocurrency payments from clients in Colorado and Virginia.
Barstool permits deposits using Ethereum, Bitcoin Cash, Bitcoin, Litecoin, and DASH in those two states. However, player accounts are only maintained in U.S. dollars, and the cryptocurrencies are first exchanged for dollars using a partner cryptocurrency exchange platform that has been approved as a vendor by the state's gaming regulators.
IAGA International Gaming Summit
The International Association of Gaming Advisors (IAGA) International Gaming Summit in Boston focused heavily on the hotly debated issue of the possible incorporation of cryptocurrency payments into the regulated online gambling market.
Regulations in Virginia and Colorado, among other states, give gaming regulators the power to accept payment methods other than credit and debit cards or ACH payments. Wyoming is still the only state that specifically recognizes cryptocurrency, digital, or virtual currencies as an acceptable form of payment for online sports betting.
According to Virginia Lottery deputy general counsel Bob Fontaine, the board of directors ultimately felt confident that Barstool and its parent company, Penn Interactive, had robust internal controls in place to oversee deposits made using cryptocurrencies. Fontaine also mentioned that cryptocurrency payments are becoming increasingly popular in other industries.
Delegates at the IAGA conference were informed by Fontaine that the discussion was not as difficult as they had anticipated.
Customers who want to deposit using cryptocurrency must, among other restrictions, complete a Know Your Customer (KYC) check and resubmit a valid government ID for inspection, according to Barstool.
Customers in Virginia and Colorado cannot withdraw money using cryptocurrency; they can only make deposits.
A representative for the Colorado Division of Gaming said in a statement that Democratic Governor Jared Polis has implemented a number of additional measures, such as appointing a chief blockchain architect inside the state government, to embrace cryptocurrency-friendly laws.
At the transactional layer, cryptocurrency deposits are exchanged for sports bets, and the operator and its exchange partner take on all the risk.
According to a spokesman, the Division is okay with cryptocurrency deposits into operators' operational procedures because they support the governor's initiatives and were authorized after the Division determined that the transactions comply with internal control procedures and transaction rules.
However, not all US authorities are prepared to approve deposits made via cryptocurrency exchanges, and it doesn't seem like digital currencies will be accepted in the two biggest online gambling marketplaces in North America very soon.
David Rebuck, the head of the New Jersey Division of Gaming Enforcement, spoke at IAGA and mentioned the recent decline in cryptocurrencies, which has led to an increase in consumer protection concerns and inquiries into the topic by NJ and other state authorities.