Your SlideShare is downloading. ×
NAGRA 2014
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×

Saving this for later?

Get the SlideShare app to save on your phone or tablet. Read anywhere, anytime - even offline.

Text the download link to your phone

Standard text messaging rates apply

NAGRA 2014

130
views

Published on

Published in: Law, Economy & Finance, Business

0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
130
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
1
Comments
0
Likes
0
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide

Transcript

  • 1. Presented by: Lawrence G. Walters, Esq. WWW.GAMEATTORNEYS.COM North American Gaming Regulators Association Annual Conference – June 9-12, 2014
  • 2. • Virtual currency has been attempted since the inception of the Internet • Beenz.com famously failed in 2001 • Bitcoin, in 2009, brought with it a resurgence of “altcoins” The Beginnings of Alternative Currency
  • 3. History of Bitcoin • November 2009: Satoshi Nakamoto published “Bitcoin: A Peer-To-Peer Electronic Cash System” • January 2009: “Genesis Block” mined • Bitcoin meant to be: secure, non- regulated, decentralized and anonymous • Cannot be created or destroyed
  • 4. • Negative press and uncertainty: • Silk Road • Closure of Mt. Gox • Volatility of exchange rate • However: • Large, publicly traded hedge funds investing Bitcoin Today
  • 5. • Bitcoin ATM unveiled on Capitol Hill • Major websites accepting Bitcoin: Bitcoin Today, cont.
  • 6. • CoinMarketCap.com keeps track of various altcoins Other Alternative Currency Major players after Bitcoin: • Litecoin • PeerCoin • Ripple • Dogecoin
  • 7. • IRS position: Bitcoin “property,” not “currency” • Federal Judge found Bitcoin is form of “money” • U.S. Dept. of Justice: Bitcoins could be considered “legal means of exchange” Contemporary Regulatory Climate
  • 8. “The fact is that virtual currencies are unlikely to disappear entirely. As such, turning a blind eye and failing to put in place guardrails for virtual currency firms while consumers use that product is simply not a tenable strategy for regulators.” -Benjamin Lawsky, New York’s Superintendent of Financial Service
  • 9. • New York planning “regulated” Bitcoin exchanges • ATLAS ATS, a Bitcoin trading platform, has partnered with the National Stock Exchange Regulatory Climate, cont.
  • 10. • New York may attempt to adapt existing laws for virtual currency • Lawsky most concerned with money laundering and secondarily, tax issues Regulatory Climate, cont.
  • 11. • U.S. Treasury Dept. FinCEN: individual miners/users are not ‘Money Service Businesses;’ Exchanges are MSB’s • Accepting virtual currency may trigger AML and KYC obligations • Steve Stockman (R-TX) unveiled “Virtual Currency Tax Reform Act” to change status of altcoins to currency Regulatory Climate, cont.
  • 12. Recent Developments • Senator Joe Machin (D-W.Va) called for all-out ban on Bitcoin: “This virtual currency is currently unregulated and has allowed users to participate in illicit activity, while also being highly unstable and disruptive to our economy.”
  • 13. Recent Developments • Former Obama Adviser Larry Summers: “Serious mistake” to “write off” Bitcoin • Bloomberg terminal gets Bitcoin: investors believe this might stabilize price
  • 14. • FEC allows political groups to accept Bitcoin donations • $100 contribution limit per person per electoral Recent Developments
  • 15. • [intentionally blank] Recent Developments
  • 16. • SatoshiDice launched in 2012 • Estimates claim online gambling accounts for nearly half of all Bitcoin transactions • Online gamers betting billions of dollars on Bitcoin sites • CoinDesk: Legal online gambling is next major Bitcoin market Bitcoin & Gaming: The Explosion
  • 17. • For the consumer: • Anonymity • Winnings received immediately • Uniformity of currency • Operators generally take lower cuts • Transparency of transaction Popularity of Bitcoin & Gaming
  • 18. • For the operator: • Low transaction costs • Game integration • No charge backs • Widespread customer availability Popularity, cont.
  • 19. • Licensed sites accepting Bitcoin from known customers • Winpoker • Gaming regulators prohibiting/warning against the use of Bitcoin • Vera&John began accepting Bitcoin payments • Subsequently asked by Malta’s Lotteries and Gaming Authority to cease accepting Bitcoin until regulations are promulgated Developments In Regulated Jurisdictions
  • 20. • Altcoins are here to stay! • Need for regulator development of effective, coherent policies: • Reconciling anonymity of altcoins with Know Your Customer (KYC) obligations • Maintaining proper AML, accounting and financial reports • Enforcing compulsive gambling exclusions and underage prohibitions Issues Facing Gaming Regulators
  • 21. • Prohibition • Often initial reaction to unknown • Rarely works • May encourage underground operations • Customers may not understand objections, especially if they have existing relationship with company Potential Approaches
  • 22. • Conservative Regulation • Insist altcoins only come from customer with KYC info • Require traditional payment history • Require customer cooperation with access to altcoin transaction tracing • Require immediate conversion to currency • Prohibit refunds or payouts in Bitcoin • Prohibit Bitcoin-integrated games • Insist Bitcoin only be used as payment method to result in credits to account Potential Approaches
  • 23. • Moderate Regulation • Eliminate one or more of Conservative Regulation points • Rely primarily on licensees to provide accurate reporting • Include KYC / AML requirements and player/licensee cooperation for audits and verification Potential Approaches
  • 24. • Minimal Regulation • Permit payment and payout in Bitcoin • Rely exclusively on licensees to keep accurate accountings • Permit integrated altcoin games • Require AML/KYC elements to avoid corruption, underage gambling & geo- blocked or compulsive players Potential Approaches
  • 25. • No Regulation • Not a viable or realistic option • Bitcoin transactions subject to abuse due to anonymity Potential Approaches
  • 26. • Altcoins will continue to grow in popularity • Players will increasingly demand altcoin payment alternatives • Federal and state authorities will become more active in regulating Predictions
  • 27. • Getting ahead of the curve is key • Develop forward-thinking policies and practices • Update regulations as legal climate and technology evolves Conclusions/Take-Aways
  • 28. Q&A