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Why Domestic Sportsbooks Just Say No To Crypto

just say no to crypto

For me, the biggest selling point of online gambling with an offshore provider instead of a domestic operator is that you can actually bet with Bitcoin and other cryptocurrencies when gambling with the former.

Domestic books – think DraftKings, FanDuel, BetMGM, etc. – don’t accept crypto deposits or offer crypto payouts.

And what’s more, they’re not going to anytime soon.

Now, interestingly, Wyoming sports betting law actually includes crypto as a legitimate and approved means of bet funding. To our knowledge, it’s the only state to do so to date. This means crypto gambling could technically be implemented by a WY sportsbook sometime in the near future.

But that’s Wyoming. Their law also basically allows you to fund your bankroll with old broken tractors, vintage street signs, bales of hay, and anything else a given book cares to accept.

But other states aren’t that progressive, and the rules and regulations they all seem to follow (which are, for all intents and purposes, modeled after Nevada and New Jersey gambling laws) only allow for fiat trade.

This makes sense, of course, because the only reason gambling is even legal at the domestic level is tax revenue. The pastime’s availability has nothing to do with giving the customer what he or she wants (outside of some betting lines on gameday).

The regulatory aspects of crypto – or, rather, the lack thereof – are going to ensure that state-based sportsbooks and online casinos and poker rooms will be tethered to USD as sure as Tether is tethered to USD. Only more so.

This isn’t all to say that crypto will never be adopted by domestic American sportsbooks.

Many years from now, as Bitcoin et al. get more and more mainstream and the various central banks of the world realize they can’t really stop the stuff, governments may give up the ghost on their antagonism and embrace it.

But so far, due to a confluence of an ill-prepared IRS, the lack of a reliable commercial infrastructure, and the still nascent nature of cryptocurrency in general, we’re just not there yet.

So if you want to bet with your friendly neighborhood bookie, cash and card are going to be your only options. At least, that’s the case for your friendly licensed neighborhood bookie.

If you’re gambling with a friendly unlicensed neighborhood bookie, we suspect they’d be delighted to take your Bitcoin. You might only get cash payouts, but nobody’s turning down crypto when it’s dealt under the table.

And that’s the other problem with it all.

To be clear, we absolutely don’t advocate gambling with a local black-market bookmaker. It’s not exactly legal, you don’t get nearly the selection of odds you’d find online, and the copays on those knee replacement surgeries will wipe out your winnings anyway.

But it’s precisely because these illegal betting types will accept crypto that makes “legit” US-regulated services (and, indeed, the very lawmakers allowing those services to exist) so cautious and distrustful of crypto.

Again, it all comes back around to the tax situation: Right now, crypto is taxable but it’s just not all that easy for the IRS to keep track of.

That’s why over the last several years, the IRS has prioritized tax enforcement and audits on people suspected of making $20,000 or more on crypto trading each year. If you trade considerably less than that, you’re still required to report your realized crypto profits as income, but the feds don’t have too fine a net in place to make sure you do.

In many ways, crypto is still like cash.

Naturally, then, when it comes to gambling in particular, Uncle Sam isn’t interested in any ambiguity. He wants his cut, and with cash and credit, he’s set up to see that he gets it.

Eventually, when crypto reporting becomes automatic and commercial exchanges disclose every transaction to our overlords, you might see domestic betting sites begin to accept BTC, ETH, etc.

But until that infrastructure is up to snuff, for US-based sportsbooks, crypto won’t be.

Interestingly, even the best offshore betting sites – all of which accept Bitcoin, Bitcoin Cash, Litecoin, Ethereum, and a selection of other popular coins – also shy away from certain cryptos, and because of similar reasons.

Consider Monero (XMR).

Monero is a top 30 crypto coin by market cap and has been around forever. And for actual private trading, it’s the gold standard. Far more so even than Bitcoin, in fact.

That’s because Monero – unlike most other cryptocurrencies – is functionally anonymous. But this has led it to be associated with various illicit activities and has given it a reputation as the crypto of choice for criminals.

No legit online sportsbook is going to accept Monero for this simple reason. Even though these associations are pure hyperbole, top betting sites don’t want to invite the extra scrutiny that accepting XMR brings.

While this isn’t the same phenomenon keeping Bitcoin off the books at domestic books, it’s in the same ballpark.

TL;DR: If you want to legally and conveniently bet online with a mode of currency that isn’t doomed to constant depreciation, you’ll have to stick to reputable offshore betting sites. Unless you live in the aptly named Equality State.    

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