The global sports gambling industry is surging towards a projected $180 billion market by 2030. Meanwhile, crypto and blockchain-based betting platforms are preparing to disrupt their predecessors.
However, the United States’ Wire Act and the Unlawful Internet Gaming Enforcement Act (UIGEA) cast a long shadow over this sector, challenging its growth in the American market.
Crypto and Blockchain Betting Industry Could Hit Major Roadblock
Blockchain-based sports betting is a rising global industry, with startups disrupting the space and attracting significant attention. As these platforms gain traction, they face potential roadblocks in the US due to the Wire Act’s prohibition of interstate sports wagers and the complexities of ensuring bets are accepted only within the state of licensure.
The Wire Act, written in 1961, prohibits businesses from using interstate communication technology to handle sports wagers. According to the Act, penalties, fines, and imprisonment could be imposed on,
“Whoever being engaged in the business of betting or wagering knowingly uses a wire communication facility for the transmission in interstate or foreign commerce of bets or wagers.”
The UIGEA, enacted in 2006, further complicates matters for blockchain-based sportsbooks. This act prohibits businesses engaged in betting or wagering from knowingly accepting payments connected to unlawful internet gambling.
However, it does provide a potential loophole, stating,
“The intermediate routing of electronic data shall not determine the location or locations in which a bet or wager is initiated, received, or otherwise made.”
Despite these potential legal hurdles, the sheer size of the global blockchain-based sports wagering industry is too significant for US sportsbooks and state governments to ignore. One industry expert warned:
“If nothing is done, untapped revenue and tax dollars will flow to illicit markets and the Wire Act will continue to hinder the US sports gambling industry.”
Read more: Crypto Regulation: What Are the Benefits and Drawbacks?
Regulators Not Fond of Crypto Gambling
This regulatory scrutiny on blockchain-based sports betting contrasts with the treatment of traditional gambling venues. Casinos in Las Vegas are reportedly implementing changes to increase their revenues despite significant player losses.
The Nevada Gaming Control Board reported,
“Las Vegas casinos on the Strip are implementing changes that make gambling more lucrative—for the house, that is.”
Meanwhile, the cryptocurrency market, often equated with gambling, faces scrutiny in the US, with lawmakers viewing it as purely speculative. This dichotomy raises questions about the fairness of regulatory attitudes towards crypto and traditional gambling.
As the global trend towards blockchain-based sports betting continues to grow, it remains to be seen how the US will navigate these potential legal and regulatory challenges.
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Source: https://beincrypto.com/crypto-blockchain-sports-betting-legal-bill/