South Carolina Sports Wagering Bill Allows Cryptocurrency Funding, Esports Betting

Posted on: April 26, 2022, 07:33h. 

Last updated on: April 26, 2022, 02:53h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

New bipartisan legislation aimed at bringing regulated sports wagering to South Carolina contains some unique provisions, including permitting the use of digital currencies for account funding.

South Carolina sports
A line of Clemson football players take the field in 2020, above. Betters may soon be able to use cryptocurrency in bets for games like these. (Image: CNN)

House Bill 5277 (HB 5277), sponsored by Rep. William Herbkersman (R) and Rep. Todd Rutherford (D), explicitly highlights cash and cash equivalents as account funding options and as ways for winning bettors to be paid. In addition to standard definitions, the legislation defines cash equivalents as foreign currencies and “digital, crypto, and virtual currencies.”

HB 5277’s unique traits don’t end there. The bill also calls for permitting regulated esports wagering — something many of the states that currently have live and legal sports betting do not allow.

Wagering on competitive computer gaming is viewed as a future growth driver for the US sports betting industry. But it’s one that hasn’t been tapped into in a significant fashion yet. Esports is one of the most widely watched sports in the US, and analysts expect it to eclipse all traditional sports, except the NFL, in terms of television viewership over the next several years.

The bill would allow eight to 12 online sportsbooks to operate in the state.

Some Operators Keen on Crypto

Currently, sports betting is live and legal in 30 states and Washington, DC – none of which permit digital currencies as a form of payment for opening accounts or paying bettors.

Should South Carolina prove successful in altering that landscape, the idea is likely to gain traction among gaming companies. For example, DraftKings (NASDAQ:DKNG) CEO Jason Robins said last year he’d be in favor of his company accepting cryptocurrency as a form of payment. But state regulators don’t allow it.

The South Carolina legislation doesn’t mention which digital assets would be permitted for use. But it’s likely to be confined to bitcoin and a small number of other cryptocurrencies.

Bitcoin use is gaining traction at some internet and land-based casinos. But it’s yet to crack the regulated US sports betting landscape.

South Carolina Sports Betting Particulars

If passed in current form, HB 5277 would tax sports betting revenue at 10% of adjusted gross — mostly in line with the national average — and require operators to pay a $500,000 annual fee. The legislation also requires 80% of the proceeds garnered by the state to go to the education lottery fund, while 15% would go to the general fund and 5% would be allocated to responsible gaming and gambling addiction efforts.

Professional sports franchises and venues hosting NASCAR and PGA Tour events in South Carolina could apply for betting licenses and partner with commercial operators under the terms of the legislation.

The state’s current legislative session runs through June 15, indicating there could be enough time to advance the sports betting bill, which enjoys bipartisan support.

If South Carolina passes mobile sports betting, it’d have a leg up on neighbors North Carolina and Georgia. The former only permits in-person betting at tribal casinos, while gaming legislation frequently stalls and fails in Georgia.