Kentuckians might be able to use their cryptocurrency to bet on sports.
Earlier this month, the Kentucky Horse Racing Commission approved emergency regulations for the Kentucky sports betting market.
The regulations will allow the industry to launch in time for the 2023 NFL season.
But they also outlined the approved methods of funding sports wagering accounts.
Crypto, digital currency qualifies as cash equivalent
Under the “General Provisions” section of the regulations, the KHRC defines what “cash equivalent” means and lists what constitutes one.
According to regulators, cash equivalent is “an asset convertible to cash for use in connection with authorized sports wagering.”
Here’s what the KHRC lists as a cash equivalent:
- Traveler’s checks
- Foreign currency and coin
- Certified checks, cashier’s checks and money orders
- Personal checks and drafts
- Digital, crypto and virtual currencies
- Online and mobile payment systems that support online money transfers
- Electronic devices with prepaid access
This is a broad spectrum of payment methods. Some are better suited for placing a wager at a brick-and-mortar book. While others are more likely used for an online deposit.
For example, Kentucky bettors won’t use traveler’s checks for their online account unless they fund it in person. And retail bettors likely wouldn’t use cryptocurrency to wager.
Operators would still need to accept it
Just because regulators listed crypto as an acceptable payment option doesn’t mean the sportsbook has to take it.
“Each operator can set its own terms for what it accepts as cash equivalents within the bounds of the regulations,” a KHRC spokesperson told PlayKentucky via email on Wednesday.
A couple of other states also allow cryptocurrency sports betting deposits, but most operators don’t take it. In fact, Barstool Sportsbook is the only company currently accepting it.
The PENN Entertainment-owned sportsbook allows its Virginia and Colorado customers to deposit with crypto. If Barstool enters the Kentucky market, it’s possible it could extend this offer to Bluegrass State bettors.
An important note: Any of the Kentucky sports betting promos bettors see pop up as online launch nears would not involve cryptocurrency. They will all be issued as bonus bets in the form of USD. However, if a sportsbook allows crypto for deposits, a bettors could deposit with crypto coins if a deposit is necessary to claim a bonus.
Which cryptocurrency could Kentuckians use for sports betting?
The regulators didn’t specify which ones could be accepted. Once again, that would be up to the operator to decide.
If any sportsbook does decide to accept crypto deposits, you can expect them only to take coins with larger market caps.
For example, Barstool only accepts Bitcoin, Bitcoin Cash, Ethereum, Litecoin and DASH.
Coins with smaller market caps are susceptible to quick and violent swings in price. Since operators will probably use a third party to convert the cryptocurrency to USD, they will likely want the coin with a more stable price.
If a Kentucky bettor uses crypto to wager on sports, they must send the tokens to the sportsbook from either a self-custody wallet or an exchange.
However, it’s unlikely that this will be an option at most Kentucky sportsbooks.
This seems more like a situation where Kentucky regulators painted in broad strokes and listed everything that fit the “cash equivalent” definition.