Road to ICE 2024: The rise and fall of crypto – Crypto gambling

As we prepare for the highly anticipated ICE 2024, iGB is your essential guide to the latest developments in the gambling industry following last year’s event.

The upward trajectory of cryptocurrency usage continued unabated in 2023, as the gambling sector became increasingly aware of its advantages and challenges.

At the start of the year, Fabio Panetta, a distinguished board member of the European Central Bank, advocated for the regulation of unbacked cryptocurrencies under gambling laws. He highlighted the numerous failures of crypto schemes that plagued the market in 2022, attributing these collapses to structural weaknesses and operational dysfunction within the cryptocurrency ecosystem.

While existing frameworks, such as the EU’s Regulation on Markets in Crypto Assets (MiCA), target the regulation of cryptocurrency activities, Panetta emphasized the urgent need for more robust governance to safeguard market integrity.

One notable incident in the crypto gambling landscape was Stake.com, which, backed by celebrity investor Drake, suffered significant unauthorized crypto transfers in September 2023. This breach affected its Ethereum, Polygon, and Binance Smart Chain wallets. Although Stake.com did not disclose the exact amount compromised, media sources within the cryptocurrency community indicated losses of approximately $41.3 million (£32.8 million/€38.4 million).

The Expansion of Cryptocurrency in Gambling

Despite the criticism surrounding cryptocurrency, there were proponents within the gambling industry in 2023. Joe McCallum, then-Managing Director of Yolo Group, expressed ambitions to broaden access to cryptocurrency gambling, specifically targeting the vibrant 25-35 demographic, which constitutes a significant portion of the socially-engaged population.

As the operator of renowned gambling platforms like Sportsbet.io and Bitcasino, Yolo Group is well-positioned to capitalize on the burgeoning opportunities within the cryptocurrency sector as we move forward.

Significantly, in May 2023, the European Council enacted regulations mandating that cryptocurrency businesses must obtain proper authorization. This legislative change initiated a three-month timeline for national authorities across Europe to develop the corresponding authorization frameworks, paving the way for a more regulated and secure operational environment for crypto businesses within the gambling sector.

As we advance through 2024, the integration of cryptocurrency into gambling will undoubtedly continue to evolve, shaped by regulatory developments, market responses, and technological innovations. Stake.com’s experience serves as a crucial case study, highlighting the intricate balance of opportunity and risk in the expanding world of crypto gambling.