Paul Cherry, the CEO of Australian gaming operator Neds, recently stated that with the growth and widespread popularity of virtual currency, it would be a smart business strategy to introduce a gambling platform offering cryptocurrency-related services.
This comes at a time when betting regulators in Australia are considering the future of betting using virtual currency as they consider amending existing gambling regulations. New gambling laws may be added to regulate and control how cryptocurrencies are used in Australian gambling platforms.
According to recent media reports, the Australian government issued a national warning against gambling firms making plans to introduce online gaming services featuring virtual currencies.
The warning had been announced only days after Neds launched its debut Bitcoin-based betting platform, capitalizing on the recent trend in the cryptocurrency industry.
Potential of Cryptocurrency in the Betting Industry
Cherry told media outlets that he sees virtual currency as a technological solution to improve gambling platforms, and it's worth the energy for betting operators to embrace Bitcoin and other cryptocurrencies.
Considering the issued warning, the Northern Territory Racing Commission (NTRC) might impose regulations and restrictions on gambling operators who might be seeking to take advantage of the emerging niche by integrating virtual currencies to their existing modes of payment. In a case where the regulatory body consents to impose a ban on the use of cryptocurrencies in the online gambling market, the operating license acquired by Neds might have to be revoked.
According to the proposed plans Neds has put in place, the first phase of the cryptocurrency initiative would offer gambling services using Bitcoins alone. Following that, the second phase will introduce other cryptocurrencies after monitoring the response.
Neds, which obtained its NTRC license and first launched last Fall, says that the plans to integrate virtual currency betting services was not a response to customer demand but rather an internal decision as the cryptocurrency industry booms.
With the new betting system, customers could use Bitcoins to make deposits, place bets and withdrawal funds into individual accounts. According to Cherry, this will better the odds on the gambling platform. The bets will be staked in milli-Bitcoins (mBTC), which amounts to a thousandth of a coin. Instead of staking a $1 bet, one will stake five mBTC.
Cherry added that Neds is placing firm cybersecurity measures on the new cryptocurrency betting platform. Customers' identity will need to be verified electronically after they agree to anti-money laundering provisions and having all transactions recorded through the public blockchain ledger.
NTRC Emailed Operators
Within days of Neds' new cryptocurrency debut, the Northern Territory Racing Commission sent a detailed email message to online sports betting operators to suspend the use of cryptocurrencies in online gambling services until the chairman of the NTRC issues a formal message to all operators. The message was considered an informal cease and desist to immediate effect.
The timing of this message seems to be in line with the NTRC's upcoming considerations of how they can regulate betting using cryptocurrency.
The NTRC took over as the online licensing body in Australia after forming regulatory and taxation rules to be adhered to in the gambling industry. However, new consumption tax legislation is being opted so as to ease the operators' monetary burden and boost the quality of services offered to customers.
In other countries, gambling regulatory and control bodies such as the United Kingdom Gambling Commission (UKGC) allow gambling platforms to use virtual currencies as an additional mode of payment for customers, so long as those platforms are licensed by the Commission.
However, the U.K. government and its regulatory bodies are more focused on the market, imposing and implementing strong measures on social responsibility and anti-money laundering laws.
At present, it is unclear what the outcome will be for the integration of cryptocurrency into Australian gambling platforms as long as the federal regulatory bodies are limiting the ability for operators to do so. Perhaps an official regulatory framework will be unveiled in the coming months this year.
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