Australia’s leading regulator of online sports betting has asked local operators to help set rules for blockchain-based betting on digital assets.
The Northern Territory Racing Commission (NTRC), which counts all major Australian online sportsbook licensees, has released a draft regulatory framework allowing its licensees to accept use Bet made in “cryptocurrency” and payout “crypto” winnings to lucky bettors.
NTRC has given its licensees until September 29 to submit their feedback on the framework, including whether they are genuinely interested in offering illegal term rights to their customers. For those interested, the NTRC would like to know the details of which digital assets they would prefer to use.
This step has reportedly been under the spotlight for months, but still marks a 180-degree turnaround from the NTRC’s 2018 announcement. At the time, the NTRC said it did not authorize any crypto-based wagering, and ordered those offering such options to “stop and cease immediately.” The order is directed at bookmaker Neds (part of the Entain Group), which is advertising itself as Australia’s first BTC-based betting platform. (A search for ‘bitcoin’ on the Neds website currently yields a ‘no result’ message.)
An Australian lawyer who has read the framework said the NTRC is proposing a proposal for both currencies Deposits and wagers for the first year of the blockchain-based system approved by the monthly cap. The caps look pretty generous – A$2,000 ($1,380) for deposits and A$5,000 for wagers – meaning only whales and/or fallers might find them too restrictive.
There will also be restrictions regarding the movement of digital assets on and off the betting site, including requiring verification of wallet addresses and ensuring that any withdrawn “cryptocurrency” is returned to the wallet in which it was deposited.
Crucially, the framework will reportedly allow “crypto” wagering without first being converted to fiat. This would require operators to hold a sufficient amount of certain tokens to cover all pending bets, even long bets. There could be dire consequences if the sports gods orchestrate too many gambler-friendly “Black Sunday” events, forcing books to quickly acquire tokens that may have appreciated significantly in fiat value since the bet was placed.
The same dynamic may also limit digital currency betting to a short window of time between the wager and the resolution of the wagering event. Especially in the case of futures bets, such as pre-season bets on which team will emerge victorious at the end of the first six months of the season (these bets often offer very high returns for the few who correctly bet on long shots ) .
There is also a potential question as to whether a sudden surge in the fiat value of “crypto” assets could push individual customers’ monthly deposit/betting limits to the stated maximum after the fact . Not to mention the increased deposit/withdrawal costs if transaction fees on a particular blockchain suddenly spike due to network congestion or other factors.
Given some of these known unknowns, some operators may think twice about adding an “encrypted” wagering option, take a wait-and-see approach, and let bolder books test these waters first. At the same time, there are already internationally licensed bookmakers accepting “crypto” wagers from Australia without a license from agencies like the NTRC (mainly because these operators don’t have access to Australian banks).
The UK Gambling Commission (UKGC) is considered the most important regulator in the world, but it has been grappling with how to regulate the use of digital assets by its licensees. The UKGC highlighted some of the problems it faces in this regard, noting that “cryptocurrencies are more accurately called cryptoassets because they do not perform the functions normally associated with money,” in part due to costly transaction fees.
Bitcoin SV (BSV) is a digital asset that does behave like money, thanks to its unlimited Scalability and ultra-low transaction fees. It’s no wonder that BSV is attracting more and more gaming companies looking to take advantage of developments they won’t find on any other blockchain.
High volatility, inherent risk and complexity
Meanwhile, Australian Securities and Investments Commission (ASIC) Chairman Joseph Longo delivered a speech this week to the Australian Economic Development Council (CEDA) on key trends that will help shape ASIC’s priorities for the coming year. The presentation builds on ASIC’s investor research report released earlier this month, which found that 80 percent of investors do not see digital currency investments as materially risky.
On Aug. 23, Longo said: Cryptoassets are “highly volatile, inherently risky and complex” investments, especially given the rise of scammers taking advantage of consumers who don’t acknowledge the risks. Longo said ASIC’s strategy against scammers would be to “disrupt their operations, use innovative data-driven approaches to drive early intervention and, where possible, prevent losses to consumers in the first place.”
ASIC supports the development of “effective regulatory frameworks and greater regulatory transparency” for crypto assets, including working with “national and international counterparts” to ensure “coordinated action and standard setting.” This will be accompanied by enforcement action to “disrupt and block harmful products already within ASIC’s jurisdiction”, including those “that mimic traditional products or seek to circumvent regulation”.
The Australian Treasury recently announced a “token mapping” project to determine which digital assets can be regulated under existing regulations and which may require custom rules to ensure adequate consumer protection and anti-counterfeiting Money laundering work.
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Talking about Leveraging Blockchain for Gambling Compliance? Check out CoinGeek’s Bitcoin for Beginners section, The Ultimate Resource Guide to Learn More About Bitcoin – As Nakamoto As Satoshi originally envisioned — and blockchain.
