Bitcoin has many potential uses in the world, and despite the fact that it hasn’t been widely adopted as a currency, it is frequently used to address those uses. And if you consider the benefits of using bitcoin, one business the cryptocurrency actually lines up very well with is sports betting. People wagering on sports, as well as other public events for that matter, tend to be concerned primarily with security, authenticity, and personal privacy. They want to know that their deposits are safe, that betting transactions will be conducted exactly as stated, and that no personal or financial information is viewable by the broader public. Bitcoin, at least in theory, can help with all of this. In fact, it’s specifically designed to do so.
As much sense as this makes, the difficulty has proven to be similar to what it is in other industries: even where bitcoin may be a preferable option, it has trouble making a real dent in an established business. The major betting firms already have secure payment processing practices in place, so while bitcoin has crept into a few of them, it hasn’t taken over as an obvious, significantly superior option. Where it may have had an opportunity to do so, however, was in the United States, where until recently betting was by and largely prohibited by law.
That law, when it came to cryptocurrency, was somewhat ambiguous. Some will argue that existing U.S. gambling laws prior to 2018 would have applied to cryptos as well, on the grounds that they essentially addressed the concept of tokens in addition to money. However, given that the CFTC in the United States sees bitcoin officially as a commodity, and it’s difficult to define “token” (or in this context even “commodity”), it’s conceivable that on a state-by-state basis, bitcoin may have been a sort of gambling loophole. That is, the very same bet made with $100 or with 0.025 BTC may have been legal in the first instance and overlooked, or not strictly prohibited, in the second. (Note that this isn’t an endorsement of using bitcoin in this way – it’s merely an observation that it may at one point have slipped past U.S. regulations.)
Now though, it appears that bitcoin may have missed its chance to tap into the U.S. market in a way that would have made for any meaningful example. Betting is being legalized one state after another, and an emergent population of sportsbooks in New Jersey appears poised to spread fairly rapidly to other areas. These sportsbooks are traditional in nature, in some cases being direct extensions of UK companies, and for the most part – if not entirely – the use of traditional currency and exchange methods.
Had bitcoin established itself as a go-to betting option before legalization, it may have had a chance at dominating this market, which would have made for significant demand and possible a boosted bitcoin price around the world over time. As is, it appears that the cryptocurrency is more likely to remain on the fringes of the betting business – just as it is in other industries.
Alexander has worked in community growth for multiple cryptocurrency companies. He is now the Sales and Operations Manager for CoinDiligent. In his free time, he writes articles sharing his industry insights. You can get in touch with Alexander on LinkedIn.