On Wednesday, the blockchain-based Monaco Protocol, dubbed “the world’s first decentralized sports betting protocol,” went live, offering “bettors fast, low-cost trades across a shared liquidity pool,” according to a press release.
Of particular note to industry observers is the fact that the BetDEX Exchange, a well-financed, crypto-centric sports betting venture featuring former FanDuel CEO Nigel Eccles as co-founder and chairman, is being launched on the Monaco Protocol, which, according to the same release, “will be fully decentralized, open-sourced and permissionless,” allowing “third parties to build their own applications and innovate on top of the platform.”
The key words here are “open-sourced” and “permissionless,” meaning anyone, be it Joe Six-Buck or a major mobile sportsbook, is free to access the code available on the protocol — including that authored by BetDEX. The exchange currently supports only soccer wagering and is not yet licensed to legally operate in any global jurisdiction, although plans to offer more sports and get properly licensed in international markets outside the U.S. are high on BetDEX’s list of priorities, according to a corporate spokesperson.
“U.S. sportsbooks will be able to build on the Monaco Protocol,” the spokesperson told Sports Handle. “In regards to the BetDEX Exchange, the team’s immediate focus is in obtaining licensing for international markets. The U.S. is not a priority for this year.”
DraftKings-Simplebet deal instructive
But while BetDEX may not be seeking independent licensing in the U.S. anytime soon, could an enterprising American sportsbook or state-run sports betting apparatus make use of its platform before then? Given the public library-esque nature of open-sourced technology, yes — at least in theory. However, in order to lift any BetDEX wagering out of the murky crypto waters and into the legal light, there are still the requisite regulatory hoops to jump through.
“Anyone can build on the protocol [and] its open-sourced code,” the BetDEX spokesperson told Sports Handle in an email. “It will be up to each builder/operator to follow the laws and obtain licensing based upon the product they build and the jurisdictions they operate in.”
A helpful frame of reference might be DraftKings’ micro-betting partnership with Simplebet, which was announced exactly a year ago and bore fruit in the second quarter of this year, when DraftKings began offering a Major League Baseball market wherein bettors can wager on the velocity of each pitch, among other results. Simplebet supplied the technology to make micro-betting possible on DraftKings’ platform, but it was up to DraftKings to seek state-by-state permission to take the market live.
Mountain West states poised to pounce
So far, the only U.S. jurisdiction to fully approve cryptocurrency as a funding mechanism for sports betting accounts is Wyoming. However, Nevada is currently considering allowing crypto betting, while Colorado — where Barstool Sportsbook customers can make crypto deposits through a third-party provider — seems poised to head down that path as well.
Wyoming, in particular, appears to be a viable candidate for approving the exchange if BetDEX explores further expansion into the U.S. At last month’s National Council of Legislators from Gaming States conference in Boston, Wyoming Gaming Commission Executive Director Charles Moore touted the state as the most aggressive in the nation in considering crypto payments for gaming activities.
Colorado, too, appears as another possibility, given that the state will soon become the first in the nation to accept cryptocurrency for tax payments. In addition, Gov. Jared Polis made headlines earlier this year when he became the first Democratic gubernatorial candidate to receive campaign donations in crypto. As a result, the Colorado Division of Gaming remains in lockstep with the governor’s office when it comes to exploring creative options for utilizing digital currencies.
Still, some states may be reluctant to take a laissez-faire approach on crypto wagering when financial watchdog agencies on the federal level continue to scrutinize the digital currency so closely. On Tuesday, billionaire Dallas Mavericks owner Mark Cuban criticized SEC Chairman Gary Gensler for his lack of clarity on crypto, urging him to publish “bright line guidelines” for crypto lending firms to follow. At the same time, Minnesota Rep. Tom Emmer accused the SEC of acting as a “shakedown authority” with its burdensome regulations on the crypto industry.
Come in and talk to who ? Set up an appointment how ? You using Calendly these days ? Since you understand crypto lending/finances, why don't you just publish bright line guidelines you would like to see and open it up for comments ? https://t.co/N3KQAnutl9
— Mark Cuban (@mcuban) August 22, 2022