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The Regulation of Cryptocurrency Gaming Websites

| November 01, 2021, 08:00 AM

In the past few years, blockchain payments have seen a dramatic increase in capacity. Given the increasing value of Bitcoin and other altcoins, it’s not surprising that crypto transactions are beaming ever more popular among gamblers. As the number of cryptocurrency online casinos rises, a question that keeps coming up is how legal blockchain payments are. For years, digital currencies have remained unregulated in many regions. However, as areas, such as internet gambling, adopted different coins and tokens, various governments started paying more attention to this payment method. Additionally, gambling regulators are scrambling to establish rules for the use of cryptocurrencies at online casinos.

Regulation is critical in the gambling sector. The market is full of less than genuine operators that are only too eager to take advantage of unsuspecting players. Consequently, governments and regulatory agencies work together to protect consumers. So, even though Bitcoin gambling is still in its infancy, it’s imperative that the industry implements standards similar to regular gambling. Gamblers who are new to betting with digital coins might need to learn about the legality of these payment methods and everything else they come with. Keep reading to know more than a few fundamentals on this topic.

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Are Crypto Gaming Sites Legal?

Well, the answer depends on where you are asking from. The legality of digital coins determines if casinos that support them are also legal. Unlike fiat currency, virtual currency is not centralized. It means that no third-party controls crypto transactions. For this reason, many countries don’t recognize Bitcoin and other digital coins as legal tender. For years after Bitcoin was founded, most governments didn’t even bother with its regulation. However, the situation is different now. Cryptocurrencies are proving to be crucial players in the payment ecosystem as a number of big enterprises have begun accepting different coins. Presently, crypto control ranges from a total ban to full regulation. In some countries, digital currencies are illegal, while in others, they are allowed in a limited capacity.

In the United States, for example, crypto coins are not legal tender, but some states still accept them as payment options. In Montana, Texas, and Kansas, you can use Bitcoin, meaning that you can gamble with it. If you are in California, Wisconsin, or Connecticut, then you can’t sell, store or transact with digital currency. Although no specific laws prohibit gambling with crypto, you can’t use the payment alternative because it’s illegal. Countries like Canada and Netherlands that are still working on creating stable internet gambling markets, tend to be flexible in matters of crypto gaming. In the Netherlands, you can pay with Bitcoin and altcoins at online casinos without any issues.

Although casino games are illegal in Canada, players can still access them and use virtual currencies for deposits and withdrawals. The UK is another region where gamblers can transact with cryptocurrencies comfortably. In 2016, the country approved legislation that permits gambling operators to accept digital currencies. For this reason, UK-registered crypto casinos are some of the most popular. When deciding whether to gamble with crypto or not, confirm the legal status of the industry in your specific region. For instance, when reading about Cardano Casinos reviewed by Martin Hill, you can learn about the legality of gaming with Cardano before you even buy the token.

Enforcement Practices

So, what happens when online casinos or gamblers use digital currencies in regions where they are illegal? In most cases, governments don’t focus on the currency holders but the gambling operators. Tracking down gamblers paying with Bitcoin or altcoins can be tedious. Hence, regulatory authorities shut down the casinos allowing those transactions. Platforms that operate off-chain, meaning with third-party custodians, are particularly easy to monitor. Some governments, like Japan, use the taxation system to monitor crypto payments and crackdowns on gambling sites.

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For this reason, online casinos restrict IP addresses from countries and territories where cryptocurrency gambling is illegal. It means that even if the site is available, you can’t deposit or withdraw funds. Some players work around geo-restrictions by using VPNs, which allow them to block their IPs. With a virtual private network, you can visit any number of restricted websites from anywhere in the world. Another option for players is to use privacy coins, such as Monero and Zcash, which have high-level identity protections.

Nations that regulate cryptocurrency impose various rules. In the UK, for example, players must submit valid identification documents when registering at online casinos. Gambling operators also have to implement KYC (Know Your Customer and AML (Anti-Money Laundering) requirements. With these protocols, it is possible to identify crypto users who convert virtual currencies to fiat. Currency holders have to buy or sell digital coins on licensed coin exchange platforms.

The Industry’s Future

Given the miles that crypto gambling has covered in such a short time, it’s not too far of a reach to assume that it’s here to stay. For a few years when blockchain technology hit the market, critics didn’t have much hope for it. Now, countries like El Salvador are making Bitcoin legal tender. The future of blockchain gaming might not be assured, but it looks promising. As different governments work to regulate digital currencies, confidence in this payment method will keep soaring. Consequently, more online casinos will start supporting virtual coins. In the next few years, gamblers might not have to worry too much about whether they can pay with cryptocurrency legally.

Cryptocurrency gambling offers many advantages, but it comes with various regulatory challenges. Digital currencies, despite their growing demands, remain illegal in different regions. Therefore, crypto gaming is not available to all gamblers. However, many governments are warming up to blockchain payments and providing legislation that enables players and other users to transact legally. Nonetheless, the road towards crypto gambling regulation is a long one, and all stakeholders should put due effort to make it possible.

Category: Local News, NEWS

About the Author - Stephanie Maris

Stefanie is a local blogger and social media content marketer from Maryland and most recently a wife and a mother. She has an unhealthy obsession with puns, sarcasm and caffeinated beverages.

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