Cryptocurrencies: An Enigma in the Regulated Gambling Industry in the US
Cryptocurrencies have been growing in popularity over the last few years, and many people are starting to use them for a variety of purposes. One such purpose is gambling activities, but unfortunately, the regulated gambling industry in the US has yet to make any official movement toward incorporating cryptocurrencies into its operations.
Regulation of iGaming has been a lot slower than sports betting for many states nationwide with only a handful having permitted the use of online casinos. Among those regulated are Pennsylvania, New Jersey, and Michigan – the trio being the only states fully legalized – as well as Connecticut, Delaware, and West Virginia, which are partially legalized.
The Regulatory Environment: A Double-Edged Sword
On one hand, governments are keenly aware of how blockchain technology can be used to modernize existing infrastructure and reduce bureaucracy. On the other hand, governments often view cryptocurrencies with skepticism due to their unregulated nature and potential for misuse in areas such as money laundering. This has led many countries around the world to either outright ban or strictly regulate cryptocurrencies while simultaneously exploring ways to use blockchain technology in other areas like healthcare or finance. In terms of gambling specifically, very few countries have adopted regulations that allow casinos to accept cryptocurrency payments including the United States.
Also read: Top 9 Crypto NFT Games To Play And Earn
The Challenges of Incorporating Cryptocurrency Payments
In order to accept cryptocurrency payments, online gambling operators must adhere to strict “know your customer” (KYC) and anti-money laundering (AML) regulations. Unfortunately, due to the decentralized nature of cryptocurrencies, these rules become much harder to enforce, especially when dealing with international customers. For this reason, lawmakers have shied away from accepting digital currencies as a form of payment.
On top of that, there is also an issue with taxation. Since crypto transactions are not subject to taxation in most countries (including the US), it makes it difficult for states to be able to raise revenue through taxes on digital currency transactions. As figures have already highlighted, the regulated industry has provided states and the country with significant funds. According to the PA Gaming Control Board, the Keystone State has provided $1.1 billion in lifetime revenue in the form of tax, with over $500 million having been generated in 2022 alone!
Lastly, there is the issue of volatility. Cryptocurrencies are known for being highly volatile, and this can be a major concern if operators accept payments in digital currencies without properly hedging their positions. This is perhaps something that lawmakers will need to consider before allowing digital currencies to become part of the regulated gambling landscape.
Could the Implementation of Cryptocurrency Be Advantageous?
It is clear that the implementation of cryptocurrency payments in the US gambling industry could be advantageous for both customers and operators. An example of this could be that more people participate in gambling activities due to the added security and anonymity that cryptocurrencies offer.
Moreover, operators could look to offer bonuses and other promotions to incentivize customers to use cryptocurrency payments, which would benefit both parties. Online casinos like the ones in PA would use this as an incentive to attract new players if it were an available option, as they know that they would be able to target a potentially larger market.
However, despite its potential benefits, there are still many regulatory hurdles to overcome before this can become a reality. For instance, the industry must ensure that it is compliant with the KYC and AML regulations, as well as navigate taxation laws associated with cryptocurrency transactions. Additionally, more education needs to be provided to gambling operators so they can better understand how cryptocurrencies work and how they can use them to their advantage.
Until these issues are addressed, it is unlikely that we will see any major move toward the acceptance of cryptocurrency payments by US online gambling operators. Nonetheless, as the industry continues to evolve and more countries begin to recognize the potential of this new technology, it is likely that we will eventually see more widespread adoption of cryptocurrencies in the near future.
Also read: Top 10 Cryptocurrency Payment Gateways
Benefits of Cryptocurrency to the US Gambling Industry
Despite the challenges, cryptocurrencies offer several potential benefits to the US gambling industry.
One benefit is that they provide more anonymity than traditional payment methods like credit cards or bank transfers. This means that customers can remain anonymous while still enjoying their favorite casino games without having to worry about their personal information being revealed.
Additionally, since cryptocurrency transactions are peer-to-peer and don’t require any middlemen, the cost of transactions is much lower than other payment methods. This could potentially benefit both operators and customers by reducing processing fees and offering more competitive rates.
Next, cryptocurrencies are more secure than other payment methods. Since transactions are secured by blockchain technology, it makes it much harder for criminals to access customer data or commit fraud. This added layer of security could be a major plus for online casinos and sportsbooks in the US.
Finally, since cryptocurrency payments are decentralized, they can be processed much faster than traditional online payments. This means that customers will be able to enjoy their winnings more quickly and operators don’t have to worry about long wait times when accepting payments.
Will the US Gambling Industry Embrace Cryptocurrencies?
At present, it is unclear whether or not cryptocurrencies will ever be accepted by regulated gambling operators in the US. While there has been some progress on this front elsewhere, many states in America are still lagging behind on this issue.
Cryptocurrencies present a unique opportunity for online gambling operators in terms of security and cost savings; however, without proper regulation, they remain an enigma within the US-regulated gaming industry. Until more definitive laws are implemented regarding KYC/AML requirements and taxation of crypto payments, we may never see widespread adoption among American operators.
Ultimately, the decision is up to lawmakers and regulators alike; however, it remains to be seen if they will take the necessary steps in order for this new technology to become widely accepted throughout the US gambling industry.