Nevada regulators have not allowed Bitcoin or other financial payment methods tied to blockchain technology to be used on the state’s casino floor due to the volatile pricing fluctuations that can bring billions of dollars worth of cryptocurrency to zero; and the need to establish a regulatory structure to ensure taxes are collected and payment activities do not run afoul of federal anti-money laundering laws. However, the Gaming Control Board has not completely discarded crypto.
As reported by The Nevada Independent, Chairman Brin Gibson told the Legislature’s Joint Interim Standing Committee on Revenue last week the agency is open to suggestions from gaming companies supporting the use of this sort of currency during a two-hour public hearing: “We’ve told the industry to please bring your proposals to us. We will vet them and if there’s something that looks viable, we will move in that direction”.
As he stated, most of the cryptocurrency interest has come from gaming equipment manufacturers and businesses that handle financial transactions and money services, and not from individuals looking to gamble with crypto; and added that, not only in Nevada but at a nationwide level, the focus has been on expanding the use of cashless gaming technology and digital wallets rather than other backend technology.
Ben Kieckhefer, a former state senator appointed to the Nevada Gaming Commission last year, supported Gibson’s comments that regulators are committed to working with the industry on any cryptocurrency adoption “to move in a direction that is reasonable and necessary”.
Kieckhefer cited legislative efforts going back five years that helped define blockchain and language concerning virtual currencies into Nevada law. He authored legislation in the last session that created an Esports Technical Advisory Committee, where he said additional discussions will arise concerning the use of virtual currencies: “I think that that’s a good place for us to be right now, as cryptocurrency itself continues to evolve and as the gaming industry tries to figure out the right fit”.
In the past few months, cryptocurrency valuations have increased and declined with practically no forecast. It was reported that the Biden administration was preparing a comprehensive government strategy on crypto, which prompted a cryptocurrency market meltdown that ended in $130 billion of value disappearing in one day.
Last month, The New York Times reported the collapse of two cryptocurrencies developed by a South Korean investor, and a dramatic drop in the price of Bitcoin and other cryptos caused a $300 billion crash.
That volatility is the main cause of concern for Jim Barbie, chief of the control board’s technology division. He said any gaming regulations would have to include some patron of protection or reserve requirement for casinos on wagers handled with cryptocurrencies; and offered up a scenario in which a patron might place a figure wager on the outcome of the Super Bowl using crypto, where any fluctuation in price between the moment of betting, the sportsbook accepting the bet, and the winning ticket being cashed out could cause major issues.
“You can actually win the wager and be paid in cryptocurrency, but if the value of the cryptocurrency has deflated, you could potentially lose money on that endeavor. There is a unique facet to the gaming space when it comes to making use of the cryptocurrency”.
Gibson added that there are several unregulated cryptocurrency-based casinos on the internet which are not located in the US, and pointed out that one of the reasons cryptos are attractive for that kind of gambling is that “it’s difficult to trace the activities back to the individual”.
Gaming regulators say their key concerns are having the ability to collect gaming taxes from cryptocurrency transactions and ensuring there are zero issues with illicit activity that would raise the concerns of the US Department of Treasury’s Financial Crimes Enforcement Network. Gibson added that their posture “is not one of rejection. We’re just trying to get in front of something that is so complex”.
There are currently a few casinos, Resorts World Las Vegas and three other Derek Steven-owned properties, that have cryptocurrency exchange kiosks on their gaming floors, which are similar to ATMs, and allow customers to exchange Bitcoin and other digital coins for cash.