Regulatory updates: How governments address the growing crypto gambling market
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Crypto-based online gambling is only going to keep growing and governments are going to have to work with the casinos and sportsbooks
Online gambling has changed hugely over the past decade. From the introduction of sweepstake casinos to cryptocurrency deposits, there are many new ways to gamble online and governments around the world are having to work hard to keep up with the growing trends.
Cryptocurrencies are nothing new but we are seeing crypto being used more widely for online gambling now than ever before. What does this mean for the online gambling industry going forward and how are governments addressing the growing crypto gambling market?
The United Kingdom and Cryptocurrency
There have been calls from the UK government to make trading cryptocurrency itself a form of gambling.
The parliament’s Treasury committee has said they would like to see UK authorities regulate cryptocurrency as a form of gambling and not a financial service. Those who are pushing for crypto trading to be classed as gambling say that trading on something that has a volatile price and no regulation is dangerous and could lead to people losing a lot of money. However, the global markets watchdog has asked the UK to regulate cryptocurrencies in the same way as stocks and bonds, so it will be interesting to see what happens come the end of 2023.
As it stands, it is perfectly legal to buy crypto in the UK but there are no fully licensed and regulated crypto gambling sites available in the country. Many banks, however, have taken their own stance and have started to block crypto transactions.
Some crypto gambling sites from outside the UK accept British players and the regulation of crypto trading is going to have a major impact on the future of the crypto gambling market in the UK.
The United States and Cryptocurrency
Cryptocurrencies are not legal tender in the United States but cryptocurrency exchanges are legal, although it does vary by state.
However, there is still a lot of discussion in the US regarding the use and regulation of cryptocurrencies going forward, with the government working to bring in a framework for crypto trading. In terms of the growing crypto gambling market, if we take online sports betting as an example, there is currently one legal online sportsbook that accepts cryptocurrency.
Barstool Sportsbook is the only legal cryptocurrency betting site available in the United States in 2023 and the deposit options include Bitcoin, Bitcoin Cash, Ethereum, Litecoin, and DASH. However, crypto deposits are only legally available in Colorado and Virginia at the time of writing. Several online casinos available in the States, such as stake.us, use a sweepstake model to bypass traditional online gambling laws and are thus able to offer cryptocurrency deposits to players.
If we go back to September 2021, Wyoming became the first state to accept crypto as legal tender when betting on sport but this adoption of crypto wagering has not spread across the country. At the time of writing, there are offshore gambling sites accessible in the United States where crypto gambling is available and the government may look to crackdown on this as new legislation is passed in the future.
Asia and Cryptocurrency
There are many countries in Asia that have placed an outright ban on the trading of cryptocurrency and online gambling.
China is a good example and they have strict laws preventing the use of cryptocurrencies and online gambling. In India, other than the states of Sikkim and Nagaland, there is no legislation for online sportsbooks and casinos and there are strong reports that international cryptocurrencies are going to be banned in the country. India has been considering the use of its own cryptocurrency and should that be the case, gambling using crypto could become legal in the states where online gambling is legal.
Moving to Japan and it is illegal for any company based in the country to operate an online gambling site. Therefore, most of the online gambling sites in Japan are based outside the country and some of them do accept cryptocurrency for deposits. However, it is unlikely that crypto gambling is going to be fully regulated in Japan any time soon, especially when online casino games and sports betting are illegal.
Regulation surrounding cryptocurrencies is complex across the world and, in some countries, the same can be said for online gambling. Governments are working to address them both but it is not easy, especially if crypto trading itself is to be classed as a form of gambling. In the United States, there is one regulated online sportsbook that accepts cryptocurrency deposits and it is available in only two states. Crypto based online gambling is only going to keep growing and governments are going to have to work with the casinos and sportsbooks to find a suitable regulatory solution.
