This August, the American Gaming Association (AGA) wrote a letter to members of the Biden Administration requesting involvement in the digital currency conversations occurring at the executive level.
The letter from William Miller Jr., president and CEO of the AGA, is a response to the “Executive Order on Ensuring Responsible Development of Digital Assets” signed by President Biden in March.
Digital currency and the illegal Colorado gambling scene
Gray casinos, or establishments that practice borderline-illegal gambling, have been a problem that Colorado officials have been cracking down on recently.
Cryptocurrency has played a central role in these questionable operations. In Colorado, “adult gaming arcades” issue cryptocurrency instead of cash as prizes for the games.
This allows the gray casinos to sidestep Colorado gambling law since actual money is not paid out to winners. Players can then exchange their digital currency for real money at a crypto machine.
Practices like these at gray casinos call for more regulation when it comes to digital assets and Colorado gambling.
Rise of digital currency leads to questions of security risks
Cryptocurrencies and other digital assets have seen unprecedented growth in the last several years.
March’s Executive Order pointed out that this industry’s value surpassed $3 trillion in November 2021. This wildly surpasses where the industry was only five years before, which was $14 billion.
The Biden Administration says the success of the new and innovative industry brings to light notable concerns that warrant regulation.
The Executive Order stated that the rise of the digital asset industry “has substantial implications for consumer protection, financial stability, national security and climate risk.”
Executive Order aims to ‘support innovation,’ ‘mitigate risks’
The administration wants to create a total government approach to mitigating the risks of digital currency while “harnessing the potential benefits” of the technology.
The Order outlined six areas that will likely fall under the national policy when it comes to cryptocurrency:
- Consumer and investor protection
- Financial stability
- Illicit finance
- US leadership in the industry
- Financial inclusion
- Responsible innovation
Casinos and iGaming companies want to dive into cryptocurrency
The Order prompted the AGA’s letter to the administration, primarily due to casino and gaming operators’ interest in pursuing ventures in the cryptocurrency industry.
Several tribal and commercial casinos as well as operators of iGaming franchises want to get involved in the booming technology. But they want to make sure their moves comply with Bank Security Act (BSA) regulations.
The BSA mandates that casinos and other financial institutions aid the authorities in identifying and squashing financial crimes like money laundering and illegal gambling.
AGA a ‘willing partner’ for the US government in digital assets strategy
The lobbying arm of US casinos – both tribal and commercial – and the AGA supports the March Executive Order. However, the trade group wants to be a part of the process of determining national best practices for digital assets.
The primary reason for the AGA’s desire to be involved at the executive level is that, according to Miller, the gaming industry is often subject to a higher level of regulation in financial transactions.
Seeking to ensure its members are not disproportionately burdened by any future legislation regarding cryptocurrency, the AGA wants a seat at the advisory table. Miller said:
“There are often separate regulations or guidance for entities in the gaming industry. To account for the unique nature of its operations. To the extent that the government seeks input from private industry in crafting the implementation of its digital assets strategy. The Administration would benefit from the participation and perspectives of AGA’s members.”