Crypto Casinos Eyeing A Future In The U.S.

Are cryptocurrency-powered platforms the next major disruptor in online gambling? In the minds of the founders of FanDuel, the answer is yes.

Nigel Eccles and Rob Jones, two of the five entrepreneurs who created FanDuel in 2009, last week introduced BetHog, a $6 million venture that combines traditional casino games and sports betting with blockchain technology. Built on Solana and accepting multiple cryptocurrencies, BetHog targets emerging markets with features like “BetHog Originals” and player-versus-player modes.

However, depending on its aspirations for reaching customers in certain jurisdictions worldwide, the platform may face significant regulatory challenges, particularly in anti-money laundering compliance and navigating the complex legal landscape of crypto gambling. Currently excluding users from the U.S. and most of Western Europe, BetHog’s future in these markets remains uncertain.

One fortunate development for upstart crypto casinos like BetHog is there’s an incoming president, Donald Trump, whose administration has indicated an intention to cut a more accessible path for crypto-related entities, including crypto casinos, to operate in the United States legally. Throughout Trump’s 2024 campaign, he pressed for more regulatory clarity, which would make integrating digital assets into mainstream finance easier. This may benefit not only crypto casinos looking to enter the markets legally but also already existing domestic operators keen to accept crypto transactions. (This is already somewhat of an option in the crypto-progressive state of Wyoming.)

Riding the crypto boom

Although the value of cryptocurrencies like Bitcoin and its altcoin brethren tend to fluctuate, often due to their operating cycles, many Web 3.0 enthusiasts strongly believe the dawn of a new era of crypto has begun. Of course, the crypto bros/bro-ettes of years past have beaten this drum before, but for the new-age believers, there’s actual cause for optimism.

In the U.S., Trump has alluded to a change in crypto oversight from the SEC to the Commodity Futures Trading Commission (CFTC), which could lead to a less stringent regulatory environment for anything crypto-related. The value of Bitcoin has reached an all-time high and could pass the $100K mark before Trump’s inauguration in January. And even when Bitcoin “calms down,” speculators believe the value of specific altcoins like Ethereum, Solana, Ripple, and Avalanche, amongst others, will “significantly increase.“

This is why some people in the iGaming industry want to take a leap of faith. For example, Monkey Tilt, the platform whose PR firm says it is “pioneering a new era of entertainment and online gaming experiences,” recently announced that it secured $30 million in Series A funding — signaling that its backers are ready to commit to the journey.

Identifying hurdles and headaches

That said, given the money laundering concern, U.S. lawmakers will have many headaches to work through on both the federal and state levels. 

As Omid Malekan, an associate in business at Columbia Business School and the author of several books explaining the nuances of cryptocurrencies and blockchain technologies, told Casino Reports, creating policies that uphold crypto’s values and protect customers will be tough. 

“The biggest hurdle will be laws against money laundering and jurisdictional restrictions,” Malekan said. “These are harder to enforce with crypto because the networks are global and users are autonomous. Regulators can always force crypto casinos to KYC (Know Your Customer) all their users, file suspicious activity reports, and so on, but such restrictions mostly defeat the point of crypto. That’s not to say crypto is rife with money laundering; I consider AML/KYC regimes as applied to non-crypto solutions as a failed policy. I’m just saying they are incompatible.”

Malekan, however, is confident that lawmakers will come around in the long run because “the other features of blockchain, like transparency and programmability, will make much safer and fairer casinos.”

Zack Panos, one of the leading minds behind 4casters, an Ethereum smart contract betting platform, told Casino Reports that those who already use Bitcoin-focused iGaming platforms may not strongly desire their vice to become regulated.

“Most people deep into it don’t want their identity to be associated with Bitcoin,” Panos said, “and this would be a necessity for having it in regulated state markets.”

But could this lead to crypto iGaming operators preferring to run in the shadows? 

“There’s no one-size-fits-all answer,” Panos said. “Operating in legal markets has huge benefits, especially for big operators — think access to capital, high multiples. I think a lot of [the current] crypto players drive it because they don’t want KYC because it is against the ethos of crypto.”

Pivot point ahead

Depending on how the Trump administration and its allies choose to regulate crypto, which remains to be seen, some operators will have to ask themselves how badly they want to be part of the market. If KYC is a must, the marketing teams for those crypto iGaming platforms will have to work long and hard to break that stigma. 

Panos also mentioned a potential “Bitcoin tax.” If lawmakers don’t make entry into the regulated U.S. market cost-effective for operators, that provides motivation for them to stay in the gray markets or avoid the U.S. altogether.

At that point, the key question will be, is the juice be worth the squeeze? 

As BetHog founder Eccles recently said, “It’s not a dealbreaker if we can’t bring our products in without crypto.”