Wyoming ups ante on legal sports betting by allowing digital currency payments
Wyoming has joined the expanding list of U.S. states that have legalized sports betting, but the Equality State has upped the ante by allowing sportsbook operators to accept digital currency as payment for wagers.
This week, Wyoming Gov. Mark Gordon signed HB 133 into law, paving the way for state residents aged 18+ to begin placing online wagers (no retail betting permitted) as early as September 1. Wyoming is the second U.S. state to approve an online-only betting regime, following Tennessee, which launched its digital-only market last year.
However, Wyoming is the first U.S. state to permit betting licensees to accept “digital, crypto and virtual currencies’ as deposits to customers” accounts. The crypto reference comes in a lengthy list of assets deemed to be “convertible to cash,” including (but not limited to) travelers checks, money orders, credit and debit cards, online money transfers and “prepaid access instruments.”
Whether or not to accept digital currency deposits will reportedly be a decision left to each of Wyoming’s betting licensees. The state plans to license a minimum of five sportsbooks, boosting the chances that at least one will allow customers the option of funding their accounts with something other than fiat currency.
HB 133 requires betting license applicants to be currently offering online wagers in at least three other U.S. jurisdictions, which will narrow the field to a handful of increasingly familiar stateside betting brands, including DraftKings, FanDuel and BetMGM. None of these operators have so far chosen to comment publicly on their potential digital currency plans.
The history of gambling regulators permitting betting with virtual currencies is relatively short. The U.K. Gambling Commission, considered by many to be the gold standard of regulatory bodies, allowed its licensees to start accepting “digital currencies” way back in 2016. However, U.K. operators have been slow to incorporate these options into their payment palette, with the handful of smaller brands that do accept BTC traditionally doing so via conversion systems offered by traditional digital payment processors.
The threadbare “crypto” language in HB 133 appears to offer licensees the discretion of choosing which cryptocurrencies they might accept as deposits. The relative popularity of the BTC and Ether tokens would seem to give those two digital currencies the inside track but, based on the UK experience, Wyoming’s sportsbooks will likely immediately convert BTC or Ether deposits to fiat for wagering purposes.
Simply put, the volatility of the BTC and Ether tokens present significant financial risk for betting operators. If a bettor was to place a wager with (say) a single BTC token and that wager panned out, the bettor would be owed his original stake plus (under the traditional betting model) an equivalent sum as winnings.
Imagine a scenario in which a single BTC token is worth $50k, but by the time the outcome of the event on which a bet is made becomes apparent, the valuation of BTC has doubled to $100k. The sportsbook is now on the hook for a payment of $100k on top of the bettor’s original $50k stake.
Sports betting is itself an unpredictable activity, and the industry is replete with horror stories of ‘Black Sundays’ in which the vast majority of NFL teams that were favored to win – and thus attracted the largest share of betting action – all defeated their opponents. Many sportsbooks have come close to the edge of insolvency due to the enormous payouts that were required from these Black Sundays, so the books’ appetite for potentially doubling their required payouts will be slim to none.
See also: CoinGeek panel, iGaming Future on the Bitcoin Blockchain
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