DraftKings to Allow Crypto-to-Cash Deposits in Four States
DraftKings announced last week that it is introducing crypto-to-cash deposits in four U.S. states, meaning bettors will be able to use cryptocurrency converted to cash to fund online sports betting accounts.
DraftKings Does Not Accept Crypto For Bets
During a recent Massachusetts Gaming Commission (MGC) meeting, Chair Jordan Maynard told commissioners that DraftKings will roll out crypto-to-cash deposits in Illinois, Kentucky, New Hampshire, and Vermont.
However, DraftKings reaffirmed that it will not accept crypto for wagers, and digital assets would be converted into U.S. dollars before entering a sportsbook account.
Although Massachusetts regulators approved DraftKings’ request for a temporary waiver to test the wagering funding method, commissioners were not in favor of the feature at a December meeting.
“We believe, basically, crypto is not ready for primetime,” said Caitlin Monahan, director of the MGC’s Investigations and Enforcement Bureau (IEB).
“We really don’t think at this moment in time, in this regulatory structure, it is a funding source that is ready to be incorporated and that we want to be encouraging.”
Wyoming was among the first states to allow cryptocurrency as a deposit source in 2021. Colorado and Virginia followed in 2022 after months of debate on whether the funding method should be approved.
Kentucky Already Permits Crypto As Wagering Funding Source
Kentucky regulators confirmed over the weekend that crypto-to-cash deposits are already permitted.
“Kentucky’s sports wagering regulations directly contemplate the use of digital, crypto and virtual currencies,” Kentucky Horse Racing & Gaming Corporation Director of Sports Wagering Hannah Simms said.
“Sports wagers may be made using forms of payment approved by Kentucky Horse Racing & Gaming including ‘cash equivalents converted to cash.’ The definition of ‘cash equivalent’ includes ‘digital, crypto and virtual currencies.’”
Simms noted that regulators conducted a full review before approving the DraftKings proposal.
“KHRG staff worked with DraftKings to evaluate their proposal. This included a full product walkthrough, review of any vendors involved and confirmation that the system underwent appropriate testing. Following that process, KHRG approved the method for use in Kentucky as it satisfies our regulatory requirements.”
Sportsbook Banned Credit Cards
DraftKings made the decision to allow crypto-to-cash deposits months after banning credit cards as a method of payment for sports betting deposits.
Multiple states have already banned or restricted credit card use for online sports betting. Those jurisdictions include Iowa, Massachusetts, New Hampshire, Rhode Island, Tennessee, and Vermont.
In addition, the licensed sportsbook announced this move amid an ongoing legal dispute.
DraftKings is facing a multi-state class-action lawsuit, alleging that the platform allows bettors in seven different states to increase self-imposed betting limits without the required waiting period.
The multi-state class-action is being headed by Michael Koester, who claims that DraftKings lets players circumvent state laws in Michigan, Colorado, Connecticut, Indiana, Iowa, Louisiana, and New York.
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