Australia eyes online betting based on digital assets

Australia’s leading online sports betting regulator is asking local operators to help develop rules for betting with blockchain-based digital assets.

The Northern Territory Racing Commission (NTRC), whose licensees include all of Australia’s major online sportsbooks, has published a draft regulatory framework that would allow its licensees to both accept bets made with ‘ cryptocurrencies’ and pay out the ‘crypto’ winnings to lucky bettors.

The NTRC has given its licensees until September 29 to submit comments on the framework, including whether or not they are genuinely interested in offering non-fiat options to their customers. For those who are interested, the NTRC wants details of which digital assets they would prefer to use.

This step would have been on the radar for months now, but nevertheless marks a 180 degree change from an advisory issued by the NTRC in 2018. At the time, the NTRC said it did not allow any bets based on cryptography and ordered those offering these options to “immediately cease and desist”. The order was directly aimed at bookmaker Neds (part of the Entain Group), which billed itself as the first BTC-based betting platform in Australia. (A search for “bitcoin” on the Neds site currently yields a “No results” message.)

An Australian lawyer who has read the framework said the NTRC is offering monthly caps on deposits and bets for the first year of an approved blockchain-based scheme. The caps seem quite generous – AU$2,000 (US$1,380) for deposits and AU$5,000 for bets – meaning only whales and/or degenerates would likely find them too restrictive.

There would also be restrictions on the flow of digital assets on and off betting sites, including requirements to verify wallet addresses and to ensure that any withdrawn “crypto” returns to the wallet from which it was taken. has been filed.

Basically, the framework would apparently allow “crypto” betting without first converting to fiat. This would require traders to hold sufficient volumes of certain tokens to pay out all pending bets, even longshots. Serious ramifications could result if the sports gods staged too many bettor-friendly “Black Sunday” events that forced the books to quickly acquire tokens whose fiat value could have appreciated significantly since the bets were placed. .

This same dynamic could also limit digital currency betting to short windows of time between placing the bet and resolving the event on which the bet was placed. Particularly in the case of futures bets, such as pre-season bets on which team will emerge triumphant at the end of the season in six months (these bets usually offer very high returns for the handful of individuals who bet correctly on long shots).

There is also the potential issue of whether a sudden increase in the fiat value of a “crypto” asset would push an individual customer’s monthly deposit/wager limits beyond their stated afterthought maximums. Not to mention the additional cost of deposits/withdrawals if a particular blockchain’s transaction fees suddenly increase due to network congestion or other factors.

Given some of these known unknowns, some operators may think twice about adding a “crypto” betting option upfront, adopting a wait-and-see attitude of letting the bolder books test those waters first. In the meantime, there are already internationally licensed bookmakers that accept “crypto” bets from Australians without permission from bodies such as the NTRC (mainly because these operators do not have access to Australian banks).

The UK Gambling Commission (UKGC) is considered the world’s leading regulator, but it has struggled to know precisely how to regulate the use of digital assets by its licensees. Highlighting some of the issues it faces on this front, the UKGC notes that “cryptocurrencies are more accurately called crypto-assets because they do not perform the functions typically associated with a currency”, in part due to fees prohibitive transactions.

A digital asset that Is functioning as a currency is Bitcoin SV (BSV), thanks to its unlimited scalability and ultra-low transaction fees. It’s no wonder, then, that BSV has attracted a growing number of game-based companies looking to leverage development advantages they can’t find on any other blockchain.

Highly volatile, inherently risky and complex

Meanwhile, Joseph Longo, Chairman of the Australian Securities & Investments Commission (ASIC), delivered a speech this week to the Committee for Economic Development Australia (CEDA) to outline key trends that will help shape the priorities for ASIC in the coming year. The speech builds on the Investor Research Report released by ASIC earlier this month, which found that 80% of investors did not view digital currency investments as involving significant risk.

On August 23, Longo said that “crypto” assets were “highly volatile, inherently risky and complex investments,” especially given the rise of scammers taking advantage of consumers who do not recognize the risks. Longo said ASIC’s strategy for targeting scammers would be to “disrupt their operation, using innovative and data-driven approaches to drive early intervention and, where possible, prevent consumer losses in the first place.” .

ASIC supports the development of “an effective regulatory framework and greater regulatory clarity” for crypto-assets, including working with “national and international peers” to ensure “coordinated action and establishment of standards”. This will be accompanied by enforcement measures to “disrupt and deter harmful products already under ASIC jurisdiction”, including those “that mimic traditional products or seek to circumvent regulations”.

The Australian Treasury Department recently announced a “token mapping” project to determine which digital assets may be regulated under existing regulations and which may require tailored rules to ensure adequate consumer protection and enforcement efforts. money laundering.

Watch: Paul Foster, CEO of Crucial Compliance, talks about using blockchain for gambling compliance on Hashing It Out

New to Bitcoin? Discover CoinGeek bitcoin for beginners section, the ultimate resource guide to learn about bitcoin – as originally envisioned by Satoshi Nakamoto – and blockchain.

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