When mainstream media outlets like Bloomberg start to report on the rise of crypto-currency sports betting then bitcoin and other cryptos are really going mainstream. In this article report that offshore bookmakers are cashing in on the current cryptocurrency mania. Here are the key points outlined in the article for those who don't have time to read it all...
- BookMaker.eu, one of the biggest names in US facing sports betting, revealed that the rate of adoption of cryptocurrencies by it's users has been swift.
- As of January 2018, over 42% of Bookmaker.eu sports bettors had used crypto for deposits and a staggering 85% of their customers have used crypto for payouts.
- In 2015, bitcoin only accounted for 10% of deposits and 8% of withdrawals so that is a very sharp increase in just 2 years.
- What's more amazing is that the bookie predicts that 100% of deposits/payouts will be processed using cryptocurrency by the end of 2018.
- The huge rate of adoption has been attributed to the fact that many cryptocurrencies offers gamblers the ability to make anonymous and censorship resistant transactions that can't be stopped by any government.
- Cryptocurrency gambling is a legal grey area because the 2006 Unlawful Internet Gambling Enforcement Act prohibits businesses from offering sports betting, poker and casino gaming to U.S. citizens but it is not aimed at individuals.
- U.S. offshore gambling is worth $60 billion per year and generates $3 billion in revenue.
- U.S. citizens are still required to report their winnings to the IRS regardless of whether they were made at offshore (illegal) bookmakers or at legal sports betting sites like DraftKings.
- The IRS requires 0.25% excise to be paid on legal wagers and 2% excise to be paid on illegal wagers.
- Calculating how much tax is required to be paid is further complicated by the volatility in the price of bitcoin, which can swing by 20% or 30% in a day.
- It is estimated that up to 15 million U.S. citizens frequently gamble illegally.
- Cryptocurrency investors who make large profits may eventually buy cars or houses which would bring them to the attention of the IRS.
- While the U.S. government does not prosecute individuals who engage in offshore gambling, they do go after companies who breach the UIGEA by servicing US citizens. A good example of this is the takedown of both PokerStars and Full Tilt Poker.