Crypto Payments in Regulated Gaming: Key Findings from the Payments, Fraud & Compliance Roundtable

Is crypto becoming a genuine alternative payment method (APM) in regulated gaming, or does it still sit in the "future potential" category? Discussions on this topic reflected the view that crypto is not yet considered a genuine alternative payment method within regulated gaming.

Representatives from major UK and European operators agreed that cryptocurrency still sits firmly within the niche category, although it has the potential to become an alternative payment method in the future.

There was also general agreement that cryptocurrency adoption is further advanced in several Latin American markets. However, within regulated European markets, participants believed there remains a considerable gap before crypto can genuinely be considered an established payment method for gambling.

A common point raised throughout the discussion was that cryptocurrency must first achieve wider acceptance as an everyday payment option before it can become a viable alternative payment method within the gambling industry. At present, it is still viewed as a niche option for everyday consumer transactions.

What do we mean by 'crypto' when considering it as an APM in regulated gambling?

A key part of the conversation focused on clarifying what is actually meant by "crypto" in relation to regulated gambling and alternative payment methods.

Attendees highlighted the important distinction between cryptocurrency being retained as a treasury asset and cryptocurrency being used as a source of liquidity and for transactional payments.

Stablecoins were generally viewed as the most suitable form of cryptocurrency to be used as an alternative payment method. Their lower price volatility makes them more appropriate for smaller deposits and frequent betting activity.

Participants also discussed how stablecoins could potentially sit alongside traditional banking rails, allowing customers to deposit using cryptocurrency before funds are converted into fiat currency within a gambling wallet.

Following this part of the discussion, there appeared to be broad agreement that regulators would most likely view stablecoins as the most appropriate starting point for a crypto-based alternative payment method, given their greater stability and traceability compared with other crypto assets.

Challenges with stablecoins for operators

Representatives from larger operators then shared their views on whether stablecoins would represent a commercially attractive solution within the current market.

One of the biggest questions raised was whether consumers actually hold stablecoins to spend on everyday transactions, such as gambling, or whether they primarily hold them as a store of value.

The general consensus was that stablecoins are not yet used widely enough for routine consumer spending. Instead, they are still used predominantly as a store of value or to facilitate cryptocurrency trading. Participants questioned whether stablecoins currently have the level of mainstream transactional adoption necessary to support regular betting activity on a day-to-day basis.

Bitcoin was also discussed as the largest and most established cryptocurrency. However, participants felt it continues to face many of the same challenges as stablecoins, with everyday consumer use remaining limited and much of its adoption centred on investment, wealth preservation and larger international transactions.

Integrating crypto into a regulated market

Operators expressed the view that there is still a considerable gap between today's operating model and one in which cryptocurrency serves as a mainstream alternative payment method within regulated gambling.

Participants pointed out that implementing crypto payments in one jurisdiction could influence how an operator is perceived by regulators in other regulated markets. Consequently, many larger operators remain hesitant to introduce a payment method that continues to be viewed as controversial or politically sensitive in certain jurisdictions. This could present commercial risks to existing licences, partnerships and revenue streams.

There was also considerable discussion around whether crypto payments are genuinely addressing a customer need within regulated markets.

The general opinion was that most players in established regulated jurisdictions do not currently want cryptocurrency as a payment option for gambling and that its introduction alone would be unlikely to encourage players to switch operators. Participants suggested this is unlikely to change until wider crypto adoption reaches a point where smaller, everyday consumer transactions become commonplace outside the gambling sector.

For this reason, several larger UK operators indicated that they are unlikely to prioritise the implementation of crypto payments while current payment systems continue to perform successfully.

Participants agreed that, before crypto integration becomes commercially attractive at scale, operators would need:

• Clear and widely accepted regulation.

• Regulatory consistency across major jurisdictions.

• Confidence that adopting crypto payments would not negatively impact existing licences, partnerships or revenue streams in other regulated markets.

Crypto and the black market

A significant topic of discussion focused on whether integrating cryptocurrency as a mainstream alternative payment method could encourage players to return from black market operators to the regulated sector.

Views on this subject were mixed, leading to a constructive discussion.

Representatives from well-established operators believed that once players move to black market operators, there is often little motivation for them to return to regulated platforms. They pointed out that offshore operators frequently offer better odds, fewer restrictions and a less regulated customer experience. As a result, participants felt that simply introducing cryptocurrency as a payment option would not, on its own, be enough to draw players back into the regulated market.

Conversely, representatives from newer and emerging operators believed that crypto payments could gradually influence the industry over time. They argued that a new generation of consumers is becoming increasingly willing to use cryptocurrency for transactions and that regulated operators may eventually need to accommodate these changing preferences in order to remain competitive and relevant with younger audiences.

Key takeaway

The overall conclusion from the roundtable was that, while cryptocurrency is widely recognised as having long-term potential within regulated gaming, it is not yet viewed as a genuine mainstream alternative payment method by most operators.

Before crypto can become commercially viable at scale, participants agreed that wider consumer adoption, clearer regulation, greater consistency across regulated jurisdictions and increased commercial confidence will all need to develop. Until then, most operators continue to view cryptocurrency as an emerging opportunity rather than an immediate strategic priority.

Author: Neal Luke | Luke ARC