The popularity of cryptocurrency exploded in 2021 and consumer interest continues to grow. One prospect of particular interest for investors is the use of cryptocurrency in the gaming industry, and for sports betting in particular.1 State legislators, regulators, and gaming operators are thus far taking a cautious approach.2
Wyoming became the first state to permit the use of cryptocurrency for sports betting transactions when it launched sports betting in September 2021.3 Wyoming law permits sports betting platforms to accept cryptocurrencies provided that the currency can be converted into a cash-based currency.4 Colorado passed the Digital Token Act in early 2022 which, among other things, permits residents to use cryptocurrency for sports betting and even to make tax payments.5 Colorado has strict licensing standards for gaming operators who want to accept cryptocurrency.6 Other states, including North Carolina and Texas, have proposed legislation that would permit the use of digital, crypto, and virtual currency, respectively, in sports betting.7 Industry commenters have predicted that sportsbooks will partner with crypto exchanges to provide digital wallets and enable betting with digital currencies.8
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