Challenges of Implementing Crypto in Italian Online Casinos
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The popularity of blockchain in virtual gambling is growing quickly. Players appreciate its anonymity, security, and global accessibility. Cryptocurrencies have been experiencing a real boom in multiple industries. According to Statista, the number of decentralized financial system users boosted from 101 million in 2020 to 425 million in 2022. Online gaming establishments have not become an exception. The number of players using Bitcoin is increasing the number of decentralized financial system users
ADM is the main body regulating casinos in Italy, operating under the AAMS license. Cryptocurrencies are legal and controlled in the country but are still prohibited in the gambling industry. It is a huge disappointment for many AAMS casino players, as Bitcoin is considered one of the most convenient and reliable payment systems. However, multiple challenges hinder blockchain implementation in Italian online gaming establishments.
Currently, the local gambling regulations do not allow Italian ADM online casinos to add cryptocurrencies to the list of available payment methods. Even though the country has already implemented laws implying that the crypto environment complies with the European Union standards, a base for the gaming industry is still unclear.
Increased crime levels involving cryptocurrencies remain the primary obstacle for blockchain applications in online casinos. Money laundering is often conducted via Bitcoin, as tracking transactions is impossible. The Italian government aims to eliminate fraud, so cryptocurrencies are prohibited for AAMS casinos.
Moreover, many say that blockchain lacks security. The decentralized financial system is considered reliable and safe, but casinos still report instances when their platforms were hacked and money stolen. Even despite high levels of protection, fraudsters find ways to break the code and steal personal and banking details.
Taxation is another challenge both operators and users face. Cryptocurrency usage implies a 26% tax for sums over €2,000. Therefore, casinos and players must pay a significant sum of their income. While it may be beneficial for the state budget, not everyone would agree to such conditions.
Not many people think about this aspect, but implementing blockchain technologies is costly for every business, and gambling establishments are no exception. Maintaining networks requires hiring well-trained specialists, as the crypto ecosystem is complex. Even though the blockchain must run smoothly without interruptions (and guarantee instant transactions), the increased number of users can cause failures.
Blockchain interoperability is another point that stops casinos from providing access to crypto payments. Many blockchain networks are isolated and cannot interact with different peer networks. Receiving data from other networks and their applications is impossible. Therefore, it causes problems when transferring funds.
cryptocurrencies’ security is still doubted by many. So, service providers must develop additional protection mechanisms to guarantee that casino members’ personal and banking data is 100% safe. Online casinos face the need to develop a complex technical infrastructure for Bitcoin usage, which will provide full security and smooth work.
Investing in cryptocurrencies is a bit risky. Considering the volatility of Bitcoin and other coins, there is always the chance that the situation can change upside down instantly. It can become a problem for online casinos, as they can lose significant revenue due to fluctuations in asset prices. It is impossible to predict the future rates of cryptocurrencies.
Many would say fiat currencies can also have fluctuations, leading to a lack of stability. Moreover, players come to gambling establishments to experience an adrenaline rush and risk their funds. So, why not get even more emotions and use volatile crypto? In any case, possible financial risks for casinos are among the factors preventing the implementation of blockchain technologies.
The complete anonymity and privacy of cryptocurrency users cause significant challenges for AML policies. Money laundering through gambling is widespread, as it is the simplest option. A fraudster simply invests a particular sum in an online or offline casino and exchanges it for gaming chips. After that, the money is withdrawn and used for other purposes. This system also allows the transfer of loads of cash to different jurisdictions. The process is often conducted using cryptocurrencies, which are impossible to track. Italian casinos regulated by ADM try to prevent money laundering and that’s why Bitcoin, Ethereum, etc., are forbidden on platforms operating under domestic licensing.
KYC policy is also essential for online casinos – and cryptocurrencies help users get around this ban. In fact, most online casinos require user verification. It implies a new member should pass an identity check by providing appropriate documents. That is not the case with cryptocurrencies since confirmation is usually unnecessary. It imposes huge risks for the casinos themselves, as they never know whether their client is an innocent player or a scammer. Lack of proper authentication is another challenge for crypto casinos, but operators are already working on measures to cope with the problem.
Special mechanisms and a thorough verification process should be added to comply with KYC and AML technologies. Such measures will help ensure smooth and transparent usage of cryptocurrencies in Italian online casinos. However, many players would be dissatisfied with such a policy since anonymity is exactly what users value in blockchain transactions.
Cryptocurrencies are spreading worldwide, but the Italian gambling market players do not seem in a hurry to implement them. First of all, such a decision is conditioned by the legal landscape – there is still a lack of regulations by AAMS. The authority requires casinos to conduct transparent and trackable fund transfers, which is not the case with cryptocurrencies.
Integrating blockchain technology implies a set of measures, including significant financial investment from the gambling operator, strengthening data protection mechanisms, and eliminating money laundering-related issues. Currently, the whole process is challenging. However, there might be solutions to the problem. We will see what the future prepares for Italian gamblers. It is possible that AAMS will provide less strict requirements, allowing crypto in casinos.
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