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How is Crypto Gambling Regulated Around the World?
Crypto Gambling (i.e., using cryptocurrencies and their related technology for gambling) is becoming more and more popular all around the world. This is especially the case in recent years. Now, then, more and more people started adopting cryptocurrencies such as Bitcoin, Ethereum, or Litecoin. Of course, the gambling industry didn’t sleep on this either and immediately adopted that new form of payment. This leads to a lot of questions about whether crypto gambling is even legal or not. Now, this question is not as easy to address as it might seem. Before we can tackle this problem, we have to establish what we actually refer to when speaking about crypto gambling. So, let’s get started…
What is crypto gambling?
If you are a regular customer at online casinos, you might have come across certain casino sites that accept cryptocurrencies such as Bitcoin for deposits and/or withdrawals. Basically, you use your cryptos to deposit just like you would with your regular FIAT currency credit card, for example. When you are playing online casino games, then, the outcome of each game round will still be determined by a random number generator (RNG) in the background as per usual.
But this is not the only way how you can gamble online with cryptos. The other options are dedicated crypto casinos which are usually based on the Ethereum blockchain technology. These offer a specific set of games where the outcome is not decided by a typical random number generator but rather by complicated calculations which are carried out through the blockchain network. This has a couple of advantages. Whether you win or lose will be calculated by a decentralized network of computers and not by a single computing unit. As multiple independent sources contribute to the calculation, it is impossible to manipulate the games and the validity of each game round can always be verified through the blockchain.
How does this affect crypto gambling regulations?
Most countries around the world are quite behind the curve when it comes to the regulation of cryptocurrencies. Plus, there are regions where online gambling is a legal gray area on top of that. Technically, cryptocurrencies are not even recognized as a real currency by the vast majority of countries either. Therefore, the question must be asked regarding whether it is even gambling when there is no “real” money involved. This leads to a very complicated situation.
The aforementioned casinos (ones that are solely relying on blockchain-based games) do not offer any gambling with FIAT currencies and are commonly decentralized. This means that they do not require a typical gambling license to operate. Most countries haven’t really paid attention to this issue yet – except for Japan. The Japanese government made an effort to ban these kinds of sites, but it’s next to impossible to contain the problem completely.
This is easier when it comes to typical online casinos that merely accept cryptocurrencies as a vessel for deposits and withdrawal. Companies running regular casino sites must have a valid gambling license in order to operate. Cryptocurrencies can only be accepted as a payment method if this is specifically allowed by the regulator. This means that it mostly comes down to the jurisdiction where the online casino is licensed, rather than the country where people are playing from.
Most jurisdictions do not allow their online casinos to accept cryptocurrencies. This includes Malta, Sweden, UK, Italy, France, and many others. One of the few casino licenses that support cryptos is the Curaçao eGaming license. This is also a so-called remote gaming license that allows operators to offer their games in other countries. This opens up crypto gambling to many unregulated countries across the globe.
What will the future bring?
Bitcoin and other cryptocurrencies are still quite new and, so far, politicians across the globe have not paid as much attention to it as they should have. This is especially true when it comes to crypto gambling. It is almost inevitable that we will see more specific rules concerning crypto casinos in the near future. What this will look like depends on the countries themselves and the regulators licensing the online casinos. At this point, it is early to make a prediction about global development as the opinions about the topic differ very strongly.