Online gambling is growing rapidly as the amount of wagers worldwide is expected to surge jumping from US$550 billion in 2016 to nearly US$950 billion by 2021, according to a report from Juniper Research.
The industry’s growth comes with an increase in the number of online gambling websites offering customers with the ability to use bitcoin and other cryptocurrencies to wage.
There are many obvious reasons why cryptocurrencies are good fit for online gambling, starting first with the (quasi-)anonymity of transactions when using these media of exchange. This comes with their user-friendliness and ease of use during transactions which are quick and simple in contrast to existing methods.
Regulation-wide, bitcoin online gambling stands in a grey area in many jurisdictions. Online gambling itself is regulated differently around the world: some countries have no restriction whatsoever, other nations have opted for a straight ban, while others are requesting specific requirements from operators.
The United Kingdom Gambling Commission (UKGC) was among the first authorities in the world to raise the question of whether or not bitcoin gambling websites required specific rulings.
In August, the UKGC gave the green light to UK licensed online casinos to accept bitcoin as a deposit and cash out method but further said it had reservations about it in terms of proper regulation, noting that these platforms could be used to launder money.
“Bitcoin-friendly operators must satisfy themselves and the Commission that they can meet their obligations for anti-money laundering and for social responsibility,” UKGC said, as quoted by Bitcoin Agile.
Earlier this year, the government of the Isle of Man said it was looking to change its legal framework to ease bitcoin gambling. Officials have been weighing regulatory changes “to allow virtual currencies to be accepted as if they were cash.”
Currently, juridictions that are offering licensing for bitcoin casinos include Gibraltar, Costa Rica as well as Curacao, which hosts a number of well known online casinos including popular Bitcasino.io.
The US is a grey area in terms of bitcoin casino legality. What is certain, however, is that bitcoin and cryptocurrencies aren’t considered as being a legal currency, and that there is also no law prohibiting US citizens from wagering at bitcoin casinos.
The Unlawful Internet Gambling Enforcement Act (UIGEA), which was passed in 2006, “prohibits gambling businesses from knowingly accepting payments in connection with the participation of another person in a bet or wager that involves the use of the Internet and that is unlawful under any federal or state law.” This makes financial transactions from banks to online gambling websites illegal. It also prohibits credit card providers from allowing transactions to Internet gambling sites, according to Gambling With Bitcoins.
Both Russia and China strictly prohibit all of their citizens from participating in Internet gambling, and in the case of China also bans citizens to host bitcoin casinos. Despite the rulings, Russia and China are said to have large populations of online poker players.
The case is similar in Malaysia, which too has banned Internet gambling operators to offer their services to Malaysians. Companies that ignore the ruling can be prosecuted and banks are not supposed to allow any online gambling-related transactions.
Turkey as well has straightly banned both operating bitcoin gambling websites and wagering domestically for all citizens.
India has no regulation on bitcoin gambling outside of the province of Maharashtra. This means that it is legal to operate and wager on bitcoin casinos countrywide, elsewhere of Maharashtra.
It will be interesting to see if Bitcoin will be allowed for gambling and as a legal currency.
Featured image by evantravels via Shutterstock.