Crypto sports betting: Transactions, future holds and Benefits
Cryptocurrency is becoming more popular worldwide as people begin to realize the benefits of using a decentralized currency to make online transactions. For example, funds transfers can be completed without any third-party involvement.
This makes it ideal for online activities like sports betting. As virtual currencies continue to increase in popularity, the top sportsbooks in the U.S. could soon start making crypto sports betting available to their customers.
Wyoming became the first U.S. state to permit online sportsbooks to accept cryptocurrency for transactions when it launched the activity in September 2021. The law allows online bookmakers to use cryptocurrency transactions as long as bettors can convert the currency into cash. Colorado later passed the Digital Token Act, permitting state residents to use crypto for online betting and even to pay their taxes.
More states, including Texas and North Carolina, have pending legislation that would permit using digital, crypto, and virtual currency for sports betting transactions. In addition, industry insiders predict that online sportsbooks will begin to partner with online crypto exchanges to provide digital wallets for their customers to help them start wagering using digital currency.
Although there is a high demand from U.S. players, most bookmakers still need to accept cryptocurrency, even in states where it’s legal.
How Crypto Betting Sites Work
Using cryptocurrency for crypto sports betting may seem complicated for prospective players, but it’s pretty easy to set up and use. Each transaction made is stored on the blockchain, adding an extra level of security for the player and the bookmaker.
Bettors also benefit from crypto transactions because no bank is involved in making deposits, like using credit and debit cards. This guarantees that no transaction will ever be flagged or rejected.
Setting up a Crypto Wallet for Sports Betting
The first step for players is to set up a crypto wallet to hold their currency after they purchase it. Bitcoin is the most popular currency for sports betting and is accepted in all crypto sportsbooks. Once players buy cryptocurrency at a crypto exchange, they can add the funds to their wallet.
Players should go to their online sportsbook to send crypto to their sports betting account and select Bitcoin as the deposit method. They will then be provided with an address, which needs to be copied and pasted as the address to send funds from their crypto wallet.
Once the address is pasted and the player hits send, the amount they selected to deposit will quickly be sent to their sports betting account. This process rarely takes more than a minute.
How Sportsbooks Benefit From Crypto Transactions
Online bookmakers that use cryptocurrency deposits prefer using the method for several reasons. First, there are no fees involved that are typically charged by third-party regulators. Involvement by outside parties is one of the biggest and most frustrating challenges that online bookmakers face, especially those that are offshore.
This is why these providers were the first to adopt cryptocurrency transactions as soon as they were available.
Deposits using cryptocurrency aren’t regulated or controlled by any centralized institution. Blockchain ledgers give bettors and bookmakers complete protection with fast processing times and no fees. This makes it easy for the sportsbooks to pass along those savings to the customers by offering more favorable odds and bigger bonuses when depositing using crypto.
How Players Can Benefit From Using Crypto Transactions
Making transactions using cryptocurrency for crypto sports betting has given customers an efficient method for online wagering that didn’t exist just a few years ago. Besides faster transactions and no transaction fees, betting with crypto has eliminated transaction limits and minimum withdrawals and deposits.
For many bettors, this made crypto betting a more attractive choice than using traditional online bookmakers.
Crypto sportsbooks also offer bigger bonuses for players that use crypto as their deposit method. It’s also one of the fastest ways to collect winnings, with no limits on the amount players can deposit or withdraw. However, bettors can only use cryptocurrency transactions to make deposits in states where crypto sportsbooks are legal, like Wyoming and Colorado.
Online sportsbook platforms have transformed the best features of blockchain technology, and cryptocurrency into useful tools players can use to get the best online sports betting experience. For now, players can relax knowing that blockchain technology’s privacy design will always protect their identity and assets when they make wagers online.
Challenges For The U.S. Gaming Market
Consumer interest in cryptocurrency continues to grow in the U.S., with many investors interested in the use of cryptocurrency in the exploding online gaming industry, specifically in sports betting. However, state lawmakers, gaming operators, and regulators have so far been cautious in approaching the issue.
Even an established gaming state like Nevada has been very cautious in introducing cryptocurrency for sports betting. In January, the state approved a change to allow customers to create and deposit funds into a cashless account for casino gaming.
This only came after the state’s attorney general stated that it wouldn’t conflict with any federal anti-money laundering legislation. This opened the door for the Gaming Control Board to act after recognizing it needed to balance advances in gaming technology with the integrity of online gaming laws.
Regulatory Challenges of Using Crypto for Sports Betting in the U.S.
Because all legal U.S. bookmakers are under strict regulation and must work together with regulators to create future industry innovations, the entrance of crypto into the entire market is limited because of a lack of a state-level regulatory framework. The other issue is the struggle between anonymous crypto transactions and state requirements to know the customer.
In Colorado, an online sportsbook operator has been using the Digital Token Act to allow players to deposit crypto into their sportsbook accounts through a third-party payment provider. However, to stay protected against the crypto’s volatility, the exchange rate is locked in for 15 minutes while the customer decides to make a deposit into their account. However, there is no betting or withdrawals permitted in cryptocurrency.
Cryptocurrency in the US Sports Betting Industry: Opportunities and Developments
In Mississippi, a resort recently made access to cryptocurrency available by providing crypto ATMs on the casino floor. Customers can access their crypto wallet using the kiosks and convert it to U.S. dollars. Players should also keep an eye on other U.S. states where lawmakers are trying to create the structure to improve online sports betting transactions with cryptocurrency.
The current U.S. administration has been interested in regulating cryptocurrency after President Biden signed an executive order that seeks to develop a federal regulatory framework around digital currency.
The Department of Justice has also created a new cryptocurrency enforcement team specifically focused on money laundering associated with using cryptocurrency in sports betting. Now individual states are their own primary regulators of online sports betting. There could be future challenges in developing state gaming laws regarding the use of crypto.
What the Future Holds
Future legislation is sure to change as online sportsbooks invest more in exploring how cryptocurrency and blockchain technology can benefit them in the gaming industry. There is clearly a vast interest in incorporating cryptocurrency into the U.S. sports betting industry. In addition, consumer interest in cryptocurrency will continue to increase the appeal to integrate this technology into their sports betting activity.
Suppose online providers can work with lawmakers to address the concerns at the federal and state levels. In that case, they can help integrate cryptocurrency and blockchain technology into the sports betting industry.
Although the U.S. betting industry’s involvement in the crypto-betting industry is limited right now, the legal framework in Wyoming has introduced it to the market and let other operators see that it is possible.
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Crypto Sports Betting FAQs
Using crypto to make online wagers depends on the state in which you live. Currently, it’s limited to Colorado, Virginia, and Wyoming. However, many unregulated offshore sportsbooks offer crypto betting that may need to be more secure and trustworthy than a regulated online provider.
Cryptocurrencies like Bitcoin use blockchain technology for each transaction, which makes it a safe alternative for making online deposits and taking payouts from an online sportsbook. However, players should always use a sportsbook that’s legal and regulated in their state.
In the U.S., the law states that any person or company that transfers digital assets to another person is considered to be a broker. This means that every crypto exchange online must issue a Form 1099-B to every customer and the IRS.
That depends on the state you live in. Many states, such as Texas and Nevada, don’t have a personal income tax on crypto assets.
Crypto experts all rank Nevada as the most crypto-friendly state in the U.S. This is due to many factors like the number of jobs in the crypto industry and crypto-friendly legislation. For example, local authorities are also prohibited from taxing blockchain technology, and crypto earnings aren’t subject to state taxes.
