Cryptocurrency Sports Gambling
The advent of cryptocurrencies and the explosion of Bitcoin worldwide has changed the way we think about money. Digital currencies are here, and they are here to stay. Sports betting law and legality differs massively by location. In many countries, it’s fully regulated, and others it’s strictly prohibited, and in many other jurisdictions, it’s a bit of a legal grey area.
The Federal Wire Act was passed in 1961 in the United States, which criminalized sports betting outside of Nevada and the sports lotteries in Delaware and Montana. A few years back, an appeals court ruled that the Wire Act only pertains to sports betting and not other forms of online gambling, such as poker or casino gambling.
The proliferation of online sports betting became too much for U.S. regulators to ignore, even though the businesses were operating offshore, not on U.S. soil. Still, they were accepting bets from U.S. residents, drawing the ire of the Feds. The UIGEA which passed in 2006 signaled a clampdown in future years when it came to online sports betting.
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What Do Sports Bettors Use Cryptocurrencies For?
The main reason for the adoption of cryptocurrencies by Americans and other regions is that they are outside of the traditional banking system. They’re quick speeds, and near-zero transaction fees are an excellent added bonus, but the main reason is that is out of the reach of government regulators. The UIGEA criminalized the act of banks knowingly processed online gambling transactions.
Though a few states have now been processing regulated online poker and casino gambling – processing online sports betting is still outlawed. Cryptocurrencies emerged as a store of value and a way to transfer funds on a peer-to-peer level with much lower fees and faster timeframes than traditional banking. Government interference isn’t possible using nearly all cryptocurrencies. Therefore, cryptos make an excellent choice for unregulated or grey markets.
Do Gambling Sites Accept Cryptocurrencies?
There was initially some pushback from mainstream offshore sportsbooks when the Bitcoin and cryptocurrency mania started. However, within the past several years, every online sportsbook that offers their services to Americans accepts Bitcoin as a cashier method, and many have several other cryptocurrencies available, as well.
The advantages of bitcoin over fiat-currencies are quite in online gambling markets are quite numerous. For one, there are no issues with funds being frozen or lost due to governmental seizure. Cryptocurrency transactions are also far cheaper to process and are hassle-free compared to credit cards, bank wires, money transfers, and even online eWallets, that are the most popular form of payment in regulated iGaming markets.
One could make a case that the explosion of cryptocurrencies saved offshore sports betting. We’re not going to go that far, but it has certainly helped the industry tremendously when it comes costs and payout speeds for both bettors and online sportsbooks.
Popular Cryptos For Sports Betting
These days, every online sportsbook that accepts Americans has Bitcoin available as a cashier option. Regarding the other cryptocurrencies, it’s hit or miss. Ethereum, Litecoin, and Bitcoin Cash are next most popular, and there are dozens of others that are accepted by a portion of online sportsbooks. There are thousands of alternative cryptocurrencies, and the list that sportsbooks accept may expand as they become more and more common.
The cryptocurrency revolution started with Bitcoin and BTC is still the crypto with the most value and highest acceptance rate at online sportsbooks. It has become the preferred cashier option for online sportsbooks and bettors alike. We offer a full list of resources on Bitcoin sports betting.
Litecoin (LTC) is essentially a copy of Bitcoin but does offer an upgrade in speed and is cheaper to use. It also uses a different encryption method. Litecoin is not as popular as Bitcoin at online sportsbooks but is rapidly being added as a cashier option.
Bitcoin Cash (BCH) is a hard fork of Bitcoin. There are many in the cryptocurrency that debate the scale of Bitcoin, which led to the fork in August 2017 of Bitcoin Cash. BCH is gaining popularity faster than any other coin on this list.
Ethereum (ETH) is one of the biggest cryptocurrencies today. The coin went live in July ’15. Tech wise, ETH is ahead of most other cryptocurrencies that are being accepted at online sportsbooks. It’s not as popular as other currencies mentioned above but is slowly being added.
Dash (DASH) is like Bitcoin but has instant transactions and more privacy features than BTC. Like Ethereum, it’s not as widely utilized at online sportsbooks and other gambling sites, as BTC or LTC.
Although the above coins are the most popular, the list doesn’t stop there. Some sportsbooks accept over 30 cryptocurrencies, mostly altcoins, as of this writing. If more currencies rise to the acceptance level of the cryptos mentioned above, we will update this article.
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Pros & Cons Of Betting With Cryptocurrencies
Crypto betting has become very popular, and with good reason. There are plenty of advantages to using the most popular cryptocurrency currently on the market. Check out the benefits of using cryptocurrencies to bet on sports and you will realize it is the best way to gamble on your favorite teams.
This is far and away the best reason to utilize cryptocurrencies when betting sports online. Cryptos are incredibly cheap to send and receive, (usually under a dollar, even for five figures) and almost all sportsbooks charge zero fees to send and receive them.
This is quite the contrast from the methods that players have been used to over the years, such as checks, bank wires, and money transfers. Checks are the most popular withdrawal method behind cryptocurrencies and sites usually do offer one free check month, but the max amount available is often just a few thousand dollars per check. After that, most checks come with a fee around $50.
Bank wires have a more substantial maximum amount, but again, there is usually a $50 fee, plus extra banking fees for the intermediary and receiving banks. Money transfers have extremely low maximum amounts per transaction ($1,000 or less) and higher fees than both other methods.
Bettors may end up losing 10% or more of their profits to fees if they’re using traditional fiat currency methods for withdrawals. Converting BTC into fiat currency and then getting it back to your bank account also comes with some fees, but they’re still far lower than opting for checks, bank wires, or money transfers from online sportsbooks.
In addition to a massive reduction in payment processing costs – cryptocurrencies are also much faster than checks, bank wires, and other fiat methods. Some sportsbooks process Bitcoin payouts instantly while others take up to 48 hours. However, in almost all cases, from reputable betting sites, you’re not waiting much longer than 48 hours for your funds and typically – the wait is a lot shorter.
In comparison, other cashier methods, not only have fees, as mentioned above but take far longer to reach players. The fastest sportsbooks online get checks to players’ doorsteps in 3-4 days, but those speeds are rare. Most likely it’s taking about a week and even up to two weeks for checks. Many times, it’s longer. Bank wires have a similar timeframe.
Money transfers usually take 48 hours or less, but as mentioned above, the max amount is quite low compared to cryptocurrencies. Also, let’s not forget that the payouts are not only slower using fiat-methods, but that the extra fees versus no fees with crypto – make it a slower, but more costly option, as well.
It’s a misconception that cryptocurrencies are anonymous, though, some do have features that make them near-anonymous. Bitcoin and other mainstream digital currencies are not anonymous but are a better option for bettors who don’t want to send their financial information to sportsbook operators and their payment processors.
Most online sportsbooks do process credit cards and debit cards with no issues, but there are still problems at some sites. 5Dimes Sportsbook has ongoing fraud issues with credit cards that customers used to deposit. They have yet to acknowledge the issues.
Most sportsbooks will still ask you to prove your identity and go through a KYC process before you can receive a payout. However, some BTC-only or a sportsbook that solely operates using cryptocurrencies may not. Regardless, cryptocurrencies do keep your financial information off the web and preserve more anonymity compared to other cashier methods.
The cryptocurrency betting market is ever changing. Trading is constant; it’s not like the Stock Market that shuts down and reopens the next day. So, if you’re holding any cryptocurrencies, prices will go up and down, at all hours. For some, even though they gamble on sports, their currency going up and down, is a bit too much risk.
There have been situations where the price of BTC rose, and bettors who held their bitcoins in an exchange or wallet ended up making a profit with the rise in price. Of course, this goes the other way, as well.
Most sportsbooks convert crypto deposits instantly into U.S. Dollars. So once, you deposit, you won’t have to worry about ever changing price. However, some crypto-only sportsbooks always hold balances in BTC or a specific cryptocurrency.
Nevertheless, payout times can’t be predicted, and once you receive the currency from the sportsbook, the value of your coins will reflect the market’s moves. However, there are ways around this. Some exchanges would convert received BTC into USD immediately on deposit, using the same conversion fee if one were to do it manually. This is an excellent way to insulate yourself from crypto price changes.
Using cryptocurrencies or digital currencies is simple to learn and isn’t all as daunting as it may seem from the outside. We even have a step-by-step guide to deposit at online sportsbooks with Bitcoin. We always offer to help people new with cryptocurrencies if they want to bet sports online. But, after lots of emails back and forth – some people just don’t want to use cryptocurrencies.
Of course, we highly recommend using them due to the benefits outlined above, but it’s still perfectly viable to bet online using cashier methods besides cryptocurrency.
You Still Have to Convert Crypto Back to USD
If you want to cash out your sports betting winnings and/or your original deposit and get it back into your bank account – you will need to convert it back to fiat-currency from cryptocurrency. There is a fee for this conversion which is done at cryptocurrency exchanges.
Some exchanges may charge up to 5% for this, but many provide this service for 0.25%, including one of our favorites, BitStamp.net. Transfers back to your bank, are free.
So yes, bettors will have an extra step to go through if they want to realize their winnings into the currency of their choosing entirely, but it’s still far better than the 10% or more that they will pay using checks, bank wires, and money transfers, instead.
Cryptos And Taxes On Gambling Winnings
Paying taxes on cryptocurrencies is a requirement by the IRS, just as you would pay capital gains tax on your stock market holdings. We have a guide for sports betting taxes, but are not accountants ourselves and recommend seeking the advice of a tax professional, when possible. The IRS rules on cryptocurrency reporting are evolving each year, so it’s important to keep up to date on filing rules.