How crypto sportsbooks work: licences, wallets & risks

A neutral guide to who licenses crypto betting operators, where they are lawful, how deposits & withdrawals are screened, & what happens when operator wallets are hacked.

What a crypto sportsbook is

A crypto sportsbook is a betting operator that lets customers deposit & bet using cryptocurrency instead of, or alongside, conventional money.

The UK Gambling Commission, in a report on illegal online gambling, describes cryptocurrencies such as Bitcoin as “digital or virtual currencies secured by cryptography”. It adds that they “are not controlled by central authorities (banks and governments) and also use blockchain technology”. The same report describes a blockchain as “an online ledger”.

The two questions that matter most for a reader are where the deposited money is held & which regulator, if any, oversees the operator. This guide takes those in turn, using regulators’ own statements where they exist.

Who licenses them

Curaçao is one licensing jurisdiction for online gambling. According to HBN Law & Tax, Curaçao’s National Ordinance on Games of Chance, known by its Dutch initials LOK (Landsverordening op de kansspelen), was approved by parliament & became effective on 24 December 2024.

Under the LOK, gaming licences are issued by the Curaçao Gaming Authority (CGA), which also supervises the sector. The firm lists the other main changes as economic substance requirements, compliance requirements, anti-money laundering (AML) requirements & clarification of the tax consequences of transactions in the gaming sector.

The Curaçao Gaming Authority describes itself as the regulator for the online gaming industry under the LOK. It is also the supervisor for compliance with AML rules & rules on countering the financing of terrorism (CFT).

A notice on the CGA’s website says its online gaming portal is offline while the authority moves to a new regulatory platform.

Where they are legal for you

In Great Britain, the UK Gambling Commission states: “It is illegal for gambling operators in Great Britain to allow consumers to use cryptocurrency to deposit money.”

In a speech on 20 October 2025, the Commission’s chief executive Andrew Rhodes said “right now we don’t have any licenced operators offering crypto”. He added that “in the illegal market it is widespread”.

The Commission uses “illegal gambling” for companies that offer gambling to consumers in Great Britain without its licence. It says the illegality lies with those companies, not with the people who use them.

In the US, SiGMA reported on 8 April 2021 that Wyoming’s House Bill 133 had been signed, allowing sportsbooks to accept digital currencies, including crypto, provided the crypto could be converted back into cash.

The same report says the Wyoming Gambling Commission regulates betting there. Licences are open to operators already active in at least three US jurisdictions, at a cost of $100,000 for five years.

In Michigan, Legal Sports Report reported on 28 April 2025 that the Michigan Gaming Control Board (MGCB) had sent cease-&-desist letters, formal demands to stop operating, to SportsBetting.ag & BetOnline.ag. Both are based in Panama & unlicensed in the state.

The board found the two books in breach of laws including the Lawful Internet Gaming Act & the Michigan Penal Code, & said it would take further legal action if they did not leave the state within 14 days. The report does not say whether either book accepted crypto.

Deposits: coins, chains & conversion

According to iGaming Business, the CGA has issued a crypto policy guideline for holders of its business-to-consumer (B2C) online gambling licences. It took effect in June 2026 & covers deposits, wagering, withdrawals & treasury management.

Under the guideline, licensees may accept crypto only for gambling. They may not act as exchanges, custodians or virtual asset service providers (VASPs).

On which coins are acceptable, fiat-backed stablecoins are preferred. These are coins backed by conventional government-issued currency. Privacy coins, meme coins & wrapped tokens of unclear origin require assessment or exclusion.

Operators must also have blockchain analytics capability, meaning wallet screening, risk-scoring & transaction monitoring at both deposit & withdrawal. A deposit is therefore checked as well as a cash-out.

Withdrawals & the verification wall

Because Curaçao’s guideline applies screening at withdrawal, a payout from a licensee can be checked before it is sent. iGaming Business reports that funds linked to mixers, tumblers or sanctioned addresses are prohibited outright, & that the CGA mandates immediate prohibition of sanctioned wallets, mixers & operators acting as exchanges.

The guideline also includes the Travel Rule. The publication links this to standards urged by the Financial Action Task Force (FATF), an international body, & to “a growing global regulatory consensus to curb financial crime in virtual asset transactions”.

Licensees face a timetable. They must submit a compliant crypto policy within three months & complete risk assessments, due diligence on VASPs & staff training within six months. Full compliance is due within 12 months, by June 2027.

The CGA keeps the power to demand faster compliance if significant risks materialise.

Rhodes described the same tension from a regulator’s side. He cited “traceability of funds, AML risks, terrorist financing” & asked whether crypto could demonstrate a source of wealth or serve as a source of funds.

Custody risk: hot wallets & hacks

Deposited coins sit in wallets the operator controls. Curaçao’s guideline requires player, operational & treasury wallets to be kept separate. It bans personal wallets & wallets linked to a firm’s ultimate beneficial owners (UBOs), with full segregation expected by June 2027.

CoinDesk reported on 24 September 2026 that the crypto casino Duelbits had taken its site offline after attackers drained about $7 million from its hot wallets. The losses were on Ethereum, BNB Chain, Tron & Bitcoin.

Blockchain security firm Scam Sniffer pointed to a suspected private key compromise. The bitcoin hot wallet alone lost 8.1 BTC, & most stolen assets were swapped to ether & gathered in one address holding about 2,234 ETH, roughly $6 million.

A co-founder, named as Joe, wrote on X that “user funds are safe”. He said the platform would stay offline until the investigation finished & its hot wallets were refilled.

CoinDesk adds that Stake, which it calls the largest crypto casino by volume, lost $40 million to a private key compromise in 2023. Duelbits & Stake are casinos, not sportsbooks.

Checklist before depositing

Licence: for a Curaçao operator, the licensor is the CGA under the LOK. Elsewhere, state or national regulators license operators, such as the MGCB in Michigan & the Wyoming Gambling Commission.

Local law: Great Britain bars its licensed operators from accepting crypto deposits. Wyoming’s 2021 law allows licensed sportsbooks to accept digital currency that converts to cash. Michigan has treated unlicensed offshore books as breaking state law.

Withdrawal rules: under Curaçao’s guideline, wallets are screened at withdrawal, & funds linked to mixers or sanctioned addresses are prohibited.

Custody: whether player funds are held apart from operational & treasury wallets, a requirement for Curaçao licensees by June 2027.

Safer-gambling tools: the UK Gambling Commission describes GAMSTOP as a free website that lets people self-exclude from all licensed gambling operators in Great Britain. It covers licensed operators only.

Questions

Can a gambling operator licensed in Great Britain accept crypto deposits?

No. The UK Gambling Commission states that it is illegal for gambling operators in Great Britain to allow consumers to use cryptocurrency to deposit money, & its chief executive said on 20 October 2025 that no licensed operators offered crypto.

Does any US state allow licensed sportsbooks to take crypto?

SiGMA reported on 8 April 2021 that Wyoming’s House Bill 133 lets sportsbooks accept digital currencies, including crypto, as long as they can be converted back into cash. The sources used here do not cover other states’ rules on crypto.

Who licenses online gambling operators in Curaçao?

The Curaçao Gaming Authority, under the National Ordinance on Games of Chance (LOK), which became effective on 24 December 2024. The CGA also supervises the sector for AML & CFT compliance.

When must Curaçao licensees meet the new crypto rules?

The guideline took effect in June 2026, with bans on mixers, sanctioned wallets & acting as an exchange applying immediately. Full compliance, including wallet segregation & blockchain analytics, is expected by June 2027.

What happened at Duelbits?

CoinDesk reported on 24 September 2026 that attackers drained about $7 million from the crypto casino’s hot wallets in a suspected private key compromise. The site went offline, & a co-founder said user funds were safe.

Sources

• hbnlawtax.com
• cga.cw
• igamingbusiness.com
• gamblingcommission.gov.uk
• gamblingcommission.gov.uk
• sigma.world
• legalsportsreport.com
• coindesk.com

Sources checked 9 October 2026. Information only. 18+.