Stable doors
Wider stablecoin acceptance poses questions for gambling
Passage of the GENIUS Act puts crypto recognition front and center.
In +More: Cali sweeps bill advances, sweeps operators exit West Virginia.
Tribes state their case against Quintenz’s CFTC nomination.
UK Gambling Commission challenges parliamentary committee claims.
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The crypto puzzle
A very stable GENIUS: There are about to be a lot more stablecoins in the world, providing US lawmakers get their way, but could a less volatile future for crypto provide the response to the black market that the regulated online gambling industry has been yearning for?
The GENIUS Act has been making its way through the US legislature with broad bipartisan support.
The bill would introduce federal and state regulation for stablecoins, which are cryptocurrencies pegged to a currency such as the US dollar or the price of a commodity such as gold.
Stablecoins are not new, with Tether (USDT) – pegged to the US dollar – having grown a $143bn market cap since it launched in 2014. But it has faced issues with financial credibility.
Proponents said it would bring much-needed legitimacy to the crypto market and sidestep the asset-hoarding that has plagued attempts by the likes of Bitcoin to become a genuine means of payment.
Not to be moved: Gambling regulators have typically been skittish about allowing their licensees to transact in crypto, pointing to difficulties tracing source of funds and the potential for a coin’s value to change radically while it is deposited in a gambling account.
The UK Gambling Commission, which still oversees the world’s largest regulated online gambling jurisdiction, told C+M that it allows operators to offer cryptocurrencies as a payment method, in theory.
However, none of the regulator’s thousands of licensees has told the Commission they actually want to do this. Likely, the spokesperson said, because of the high regulatory bar they would be required to clear.
In short, the Commission demands that licence-holders accepting crypto “reduce any risk to the licensing objectives to the same level that we would expect from other payment methods.”
Can we have some of that please? Meanwhile, a beleaguered industry pointed to the success of the black market in luring customers away from the regulated space by gleefully accepting cryptocurrencies of all kinds – a fact not lost on some regulators.
“It’s increasingly difficult to sustain a prohibitive approach,” said Andrew Gellatly, the executive director of the Alderney Gambling Control Commission
Alderney is “surrounded by operators that would like to use crypto and can’t,” he said, but pointed to struggles suffered by early crypto-gambling movers such as Malta and the Isle of Man.
Crypto and stablecoins, in particular, are especially attractive to consumers in emerging markets, where they offer more stability than local currencies, he noted.
Staying on the straight and narrow: But while regions such as Anjouan and Kahnawake have pushed ahead with crypto casino licences, regulators such as Alderney that are subject to more oversight are waiting for broader financial opinion to shift.
Fresh from a clean bill of health from international AML watchdog FATF, Gellatly said Alderney would only move in step with its recommendations on virtual currencies.
In a report published earlier this year, the agency said there had been “some improvement” in meeting money laundering standards globally when it comes to crypto.
However, in unhappy reading for stable fans, the FATF noted the use of stablecoins for crime has rocketed since 2024, “with most on-chain illicit activity now involving stablecoins.”
The GENIUS Act doves will need to repair that negative reputation before FATF-loyal regulators open their hearts to stablecoin gambling.
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Cali sweeps bill advances
A bill to shut sweepstakes out of California cleared a second Senate committee with unanimous approval, despite unearthing concerns over enforcement, scope and the potential impact on consumers and suppliers.
The Senate Public Safety Committee passed AB 831 in a 6-0 vote, echoing a similar blowout last week.
In testimony, San Bernardino County DA Jason Anderson said sweeps games target youth, while stressing the legislation targets companies not players.
Bill sponsor Avelino Valencia said amendments were likely to exempt suppliers and individuals, focusing enforcement only on the platform operators.
Opposition to the bill in the form of advertising and civil liberties groups has emerged late in the day, with arguments centering on the lack of consumer harm studies, and examples of how tribal groups themselves have operated unregulated social casinos.
New Zealand: The draft online casino regulations introduced in parliament at the end of last month have passed their first reading and will now head for scrutiny from a select committee. The draft regulations will allow for up to 15 licensees, with unlicensed operators facing fines of up to NZ$5m ($2.96m) for offering their services in the market.
The Netherlands: The affiliate website casinoscout.nl will have to pay up to €225k in penalty payments for promoting offshore offerings into the country. The website promoted only legal offerings until it was acquired earlier this year and now promotes offshore sites.
Ukraine’s Ministry of Digital Transformation plans to launch a system to monitor online gambling as part of its anti-corruption drive. Consultations with IT firms are set for July 21 to discuss tracking all online bets.
More than 20 online sweepstakes platforms have quit West Virginia amid a state crackdown on unlicensed operators, it has been reported. Attorney General John McCuskey has issued nearly 50 subpoenas in recent months.
FanDuel has became the first US operator to say in its terms and conditions that it will suspend and ban users from the platform who are found harassing athletes or coaches in response to a betting result.
Brazil: A newly crafted joint Congress committee will review the proposed tax rate increase on online gaming operators in the country. The proposed rate hike would bring the tax on gross gaming revenue from 12% to 18%, pushing the effective tax rate to nearly 50%. The committee is expected to hold its first hearing on August 7, with a vote on the tax hike expected to occur on August 26. If approved by the committee, the full congress must vote on the proposal by October 9.
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Tribal Quintenz complaints
That guy: Outgoing Kalshi board member Brian Quintenz should not be overseeing federal regulation of Kalshi, multiple gambling associations have warned.
The Indian Gaming Association, National Congress of American Indians and the American Gaming Association opposed Quintenz’s appointment as US Commodities Futures Trading Commission (CFTC) chair in a letter to the US Senate Committee on Agriculture, Nutrition and Forestry.
Quintenz’s clear conflict of interest should rule him out until the CFTC has decided how it wants to proceed with regulation of sports events contracts, the group said.
The letter also restated the group’s main argument that prediction markets breach the Indian Gaming Regulatory Act, the Wire Act and various state gaming laws by effectively offering unlicensed gambling via a loophole.
The nomination is expected to be voted in in the coming days, following last month’s confirmation hearing in which Quintenz said he would recuse himself from all things Kalshi until the matter blows over (it won’t blow over).
Dirty old egg-suckin’ dog: Off the back of a $2bn valuation, the self-branded “underdogs” Kalshi have spent over $1m lobbying federal officials in the last few years, according to fresh data from OpenSecrets.
The label is not sitting right with some, including industry analyst Alfonso Straffon, who noted the firm’s deep connections go well beyond Quintenz into Wall Street, Silicon Valley and the White House.
“Calling yourself an underdog when your founders graduated from MIT, worked at the likes of Goldman Sachs and Citadel, have the financial backing of the likes of Sequoia Capital, NEO, Peng Zhao, Charles Schwab (the person), Henry Kravis… etc,” he said.
“Susquehanna is your market maker plus all their influence, Trump Jr. is a strategic advisor, and the nominee to head the CFTC (your regulator!) sits on your board… seems very rich.”
Mad dog and glory: The prediction market parvenu is nothing if not bullish; founder Tarek Mansour hailed June as the most successful month in its history, as the firm insisted “semantics do not alter the fact that, structurally, Kalshi is a derivative contract maker” and not a gambling platform.
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UKGC bites back
A source with no name: The UK Gambling Commission has publicly disputed several claims made during a recent parliamentary health committee session, raising concerns about the accuracy of evidence presented regarding gambling harm levels in Great Britain.
The controversy stems from an April meeting of the Health and Social Care Committee, where gambling harm researchers called for stricter regulations on casino games and advertising.
Tim Miller, the Gambling Commission's executive director, responded with a formal letter to committee chair Layla Moran, made public on July 8, highlighting three specific statements made during the session for which no sources were provided.
Lucy Hubber from Public Health Nottingham claimed one-third of 11-16-year-olds participated in land-based gambling, citing only “local estimates.”
Professor Sam Chamberlain from the University of Southampton stated that up to 20% of young people had gambling problems in 2020.
Professor Heather Wardle from the University of Glasgow suggested skin betting among young adults was as risky as online slots.
Parental guidance: The Gambling Commission’s own 2024 Young People and Gambling Report presents different figures. The data shows 27% of 11-17-year-olds had gambled in the previous 12 months, primarily through arcade games such as penny pushers and informal betting with family and friends. Miller argued these statistics don’t support claims about one-third of young people using land-based gambling.
Crucially, the Commission’s research revealed youth gambling largely occurs under parental supervision.
8% of surveyed young people played National Lottery games online, with 7% doing so through their parents’ accounts with permission.
Similar patterns appeared across other forms of online gambling.
Look again: Following the April session, the Health and Social Care Committee wrote to the Department of Health and Social Care requesting further action to curb gambling harms and calling for a second Gambling Act review.
Miller emphasized ongoing protection measures, including new age verification requirements for land-based gambling operators and updated procedures requiring staff to check IDs for anyone appearing under 25.
Test purchasing rates for age challenges have improved from 92% in 2021-2022 to 94% in 2023-2024.
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Oct 20-23: IAGR, Toronto
Nov 18: Sustainable Gambling Conference, Brussels
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