DraftKings is launching a new online sports betting account deposit method for users in some US states, allowing cryptocurrency to be converted into cash before being deposited into accounts. This move was publicly discussed at a recent Massachusetts Gaming Commission meeting, initially covering Illinois, Kentucky, New Hampshire, and Vermont, with a gradual rollout expected in the coming weeks. It is important to note that this method does not directly accept cryptocurrency bets, but instead converts digital assets into dollars before depositing, highlighting the regulatory differences in the use of digital currencies in the gambling sector across various states. Relevant US sports betting payment compliance cases can be referenced on the PASA official website.
State Regulatory Divergence: Clear Attitudes of Support and Prohibition
The use of cryptocurrency in gambling deposits shows significant divergence among US states, with notable differences in regulatory policies:
Wyoming was the first state in 2021 to allow cryptocurrency as a deposit method, currently the only state that directly accepts cryptocurrency deposits;
Colorado and Virginia followed in 2022, allowing cryptocurrency to be converted and deposited, but not directly accepted;
Kentucky explicitly categorizes cryptocurrency as "cash equivalents," approving the DraftKings scheme after product demonstrations, vendor audits, and system tests;
Vermont also recognizes the cash equivalent status of cryptocurrencies, allowing them to be used for gambling account deposits.
Supportive states:
Prohibitive states: Massachusetts originally planned to join the test group, but updated its rules on December 19, 2024, to prohibit this method, citing concerns about regulatory gaps and money laundering risks, and considering that cryptocurrency "is not yet ready for large-scale application".
Deposit Operation Details: Rule Restrictions and Alternative Options
DraftKings' cryptocurrency-to-cash deposit method has clear operational standards, and also provides multiple alternative payment options:
Core operational rules: Cryptocurrency is not directly accepted, it must be exchanged for dollars through a licensed money transmission institution before depositing; Illinois additionally requires the exchange institution to obtain a license from the state's professional regulatory department.
Payment method adjustments: Previously, DraftKings had stopped accepting credit card deposits, and currently, several states (Illinois, Iowa, Massachusetts, etc.) have restrictions or prohibitions on credit card gambling deposits, with Virginia also passing similar legislation recently.
Alternative deposit options: Users can still choose debit cards, Apple Pay, bank wire transfers, and cash deposit services at some offline retail points.
User Key Considerations: Tax Obligations Cannot Be Ignored
Although convenient, cryptocurrency exchange deposits require users to pay attention to federal tax requirements in advance:
Taxable rules: According to the IRS, converting cryptocurrency into cash is a taxable event, requiring the declaration of capital gains or losses, with related restrictions on capital loss deductions;
Tax rate ranges: Short-term capital gains tax rates are 10%-37%, with the highest long-term capital gains tax rate at 20%;
Decision-making advice: Users in participating states should fully consider tax costs while enjoying the convenience of deposits, to avoid subsequent compliance risks.
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This article is from "PASA-Global iGaming Leaders" gambling industry news channel:https://t.me/pasa_news
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