Modern gambling is a powerful gambling industry, based on huge finances, a multi-million dollar customer market and new technology. Thanks to the internet, the gambling industry has become dynamic, international and more accessible. Who imagined that it would already be possible to play roulette for cryptocurrency, to bet on sports for virtual money.
Operators who choose Bitcoin, Steam, or any other cryptocurrency as their online casino currency are often confused by conflicting facts and ambiguous decisions by authorities.
Running a legitimate business is an understandable desire of all cryptocurrency operators. Because of this, the moment of licensing for this type of casino is still being actively discussed in the market.
It’s hard to single out a global strategy, with each region having its own cryptocurrency trends. This article is a small study to determine how strictly crypto gambling is regulated.
Crypto Gambling in the World
The European Union is a pioneer in the legalization of cryptocurrencies and is one of the most advanced regions when it comes to cryptocurrency regulation. However, at the time of writing, there is no uniform legislative system that can help scrutinize cryptocurrency operators.
Malta leads the industry when it comes to cryptocurrency regulation. MDIA, ITAS and VFA and blockchain laws were first introduced in Malta. Malta’s system is considered by some to be the best available today.
In the United States, most states do not have laws prohibiting cryptocurrency gambling. However, many regions remain divided on the issue. The Illegal Internet Gambling Enforcement Act prohibits “knowingly accepting payment in connection with another person’s participation in a wager or dispute involving use of the Internet that is illegal under federal or state law,” so all states must take this into account.
Some countries ban cryptocurrencies, but trading in cryptocurrencies is legal. South Korea is an example of a country that has successfully implemented such a system.
Many governments are making steady progress in the crypto space. For example, in August 2021, El Salvador became the first country to accept the cryptocurrency Bitcoin as legal tender.
The UK recognizes cryptocurrencies but imposes certain restrictions on cryptocurrency gambling. Casinos looking to offer crypto gambling to their players must ensure they can prove the legitimacy of their revenue source before submitting an application to the UKGC (UK gaming regulator). The application process may seem lengthy, but it is necessary to ensure player safety.
Basic facts about the legality of cryptocurrency gambling
Are gambling with cryptocurrencies actually legal? Is there a unified legislation regulating this type of gambling? Sometimes there are just more potential questions than answers.
Opinions on crypto-gambling are changing rapidly, and the legality of crypto-gambling remains restricted in many countries. To date, there are no clear answers to the above questions, but here are some key points to understand:
- There are generally no specific laws governing cryptocurrency gambling. This is neither officially allowed nor forbidden.
- The perception of various governments towards cryptocurrencies is rapidly changing, with an increasing number of countries taking a positive stance on cryptocurrencies and discussing the regulation of cryptocurrencies and blockchain services. But most governments still do not regard cryptocurrencies as real monetary assets. No conventional online casino regulations should apply to cryptocurrency gambling unless it is ‘real’ money.
- Nonetheless, countries where gambling is strictly prohibited, such as B. The United States, continue to take strict measures against online casinos or players who place bets with cryptocurrencies.
- Crypto gambling sites offer players complete anonymity. Cryptocurrency payments generally do not require verification. However, when it comes to amounts of $2,000 or Euros, reputable operators require a minimum player identification. Such procedures are necessary to ensure that AML and CFT requirements are not violated.
- Some well-known gambling jurisdictions have licensed casinos which accept cryptocurrencies (notably Curacao). This implies that they are charged with controlling the operation of virtual currency websites. As the online casino complies with the rules and norms of the chosen jurisdiction, it can legally operate.
How do cryptocurrencies work?
The first step to using a cryptocurrency casino online is to create a crypto wallet and buy cryptocurrencies with fiat currency. If players have their own crypto wallets, they can choose any casino they like. An account is available at most online casinos and betting shops.
It is difficult to determine which point is the most attractive for players: anonymity or the possibility to increase their winnings due to the fluctuations of the cryptocurrency market. We think that both options act as undeniable advantages.
Crypto-casinos in general do not differ much from other online casinos: the betting, the operating principle, the bonuses – everything is pretty much the same as in fiat online casinos. The way crypto-casinos are set up, the software on which the crypto-solutions run, is almost identical to the options offered by the market to fiat casinos.
What about the benefits?
In short, there are many. Below we will share just a few of them. For example, cryptocurrency transactions are:
- Are completely anonymous and confidential;
- no bank charges;
- not subject to inflation.
And the list could go on for a long time! The emergence of cryptocurrency as an alternative to traditional solutions has led to polar points of view in society. Of course, there is no denying some difficulty in tracking payments or the constant changing of the system. This entails certain risks. But in any case, the opportunities that cryptocurrency offers to operators are worth trying to implement this system in their business.
Should a cryptocurrency casino be licensed?
It is important to understand that iGaming companies need a gaming license in order to apply for a business bank account and officially use the electronic payment system. However, casinos do not always share information about the licenses they use. One of the most common options among operators, though, is a Curacao license.
Overall, Curacao is one of the most affordable and versatile options. It stands out for its ease of entry into the market and clear requirements for operators. Some cryptocurrencies are already accepted as payment alongside classic options. This gives players a choice and allows operators not to lose a loyal audience due to the limited payment methods provided.
When an online casino operates with cryptocurrency, all payment processing can be done internally without the involvement of third-party services that control the cryptopayment infrastructure. Deposits and withdrawals are almost instantaneous, and the cryptocurrency moves directly between the wallets of the player and the casino. Thus, there is no need to provide a gaming licence to financial institutions.
Therefore, it can be argued that at the time of writing, a licence for crypto-gambling is not a requirement, or at least not a prerequisite for accepting payments.
On the other hand, many players view crypto casinos in the same way as any traditional online casino. They want to ensure that funds are being transferred to a safe online environment and that their rights are protected by an independent body. In this case, the license serves as an important tool to encourage player loyalty and greatly enhance the casino’s reputation.
Personal safety of the customers is a priority. Players need to know that they are using a reliable platform that protects their data.
Where can complaints about cryptocurrencies be directed?
Cryptocurrencies have become a focal point for mediators for many reasons, particularly because of their ability to circumvent anti-money laundering requirements.
Unscrupulous crypto-gambling operators can also put players at risk. Mediation companies help to achieve fair, quiet and confidential resolution of iGaming conflicts. The term ‘issue arbitration companies’ or ‘mediators’ is becoming increasingly popular in the gambling industry.
Essentially, a mediator is a service that is a form of justice in the iGaming industry. Such companies not only protect players from the machinations of operators, but also casinos from the defamation of bettors.
Intermediaries are not solely in charge of conducting enquiries and dealing with grievances. In line with their responsibility to provide precise and up-to-date intelligence on online casinos around the world, the team also produces exhaustive reports on their activities, as well as blacklisting, so that punters can check the chosen platform at any time.
Their aim is to promote the industry, provide information on the most transparent operators and identify those who try to make money from their players through fraudulent means. AskGamblers, ThePOGG, and Casinomeister are examples of mediators with such a mission.
The Future of Crypto Gambling
The impact of cryptocurrencies on the iGaming space cannot be ignored. Anonymity, speed and privacy are still strong reasons for many players to support crypto gambling. Operators that only accept fiat currencies are losing a large portion of their loyal audience.
Of course, cryptocurrency legislation is expected to develop strongly over the next few years. Governments around the world are still refining their policies regarding cryptocurrencies, so the status of cryptocurrencies is now very flexible and subject to change.
Operators are now advised to comply with the gambling laws applicable to fiat currency casinos in the jurisdictions they target. This will help eliminate potential risks associated with illegal business operations.