Vantiv Entertainment Solutions no more payments for fantasy players
Slowly but surely regulators and lobbyists are pushing sports betting and fantasy sports in the direction of bitcoin. Fantasy sports are considered a game of skill and do not fall under the same regulation as sports betting. That could change in the future. Payment processors for draft kings have said that they will no longer provide service, what is next? The next step is obvious, accept bitcoin.
No matter if what people want to do is legal, illegal or in a grey area bitcoin provides a lot of advantages. In the case of backpage the service providers there started taking bitcoin as payment as paypal and other payment processors accounts were frozen. The currency of the “dark web” where people mostly buy drugs is bitcoin. This just goes to show that you can not stop people from doing what they want. No matter if it is ordering services from backpage or playing daily fantasy, where regulations get in the way bitcoin gets around them.
This all does not come without its hurdles. In order to fully comply with laws draft kings and other fantasy sports companies would have to relocate offshore if they want to continue to do business with its client base. There are also other pitfalls on the players side. Bitcoin exchange Coinbase closed accounts that sent bitcoin from their Coinbase account directly to a sports book to bet on the super bowl. A small step of “air gapping” would present enough plausible deniability to prevent this. This is just one of few basic bitcoin skills players will need to learn. This also shows how regulation will creep up at every bitcoin/USD (fiat) gateway.
There is always of course the bitcoin price that people worry about. Will they lose USD value while playing and lose money overall? There are already ways around this. You can play at a sportsbook that converts to USD value right away like 5dimes or bookmaker. Then your USD value is locked in. Of course if bitcoin goes up in value then you will not gain anything but same goes for if the price drops. You could also go the route of using a bitcoin only sportsbook like Nitrogen Sports. In order to hedge your USD value you would need to short bitcoin while you hold a bitcoin balance. There are many ways that you can do this but it is more for the people that come from a forex or stock trading background. Going short on bitcoin with high leverage while holding a balance to bet with, if the price goes down then your short position gains in value. If the price goes up your betting balance goes up in value while your short goes down. Your are now hedged while playing. As you can see the less complex way is to just use a book that converts to USD.
On thing is for sure, the use of bitcoin and gambling will only grow in 2016 and could be a breakout year.