IS GAMBLING WITH CRYPTO LEGAL?
Given all the benefits of using crypto as a currency, you would want to get in on the many sectors in which it is in use. One of these is the gambling industry where crypto casinos come up by the day. Gambling with these digital currencies allows you to enjoy speedy transactions and provides anonymity and fair gaming. As such, you would likely consider going down this road. But is it legal? Should you be gambling with crypto, and if not, what are the repercussions?
Well, it all depends on where you live. In some regions, there are legislations in place that pertain to online gambling sites. These laws work in licensing and regulating the operation of such entities and those that supply the gaming software. Such regions are known as licensing jurisdictions, in which licensing authorities operate and issue permits to gambling entities. Now, the issue of legality comes into play here. For an online site to offer services to the market, it should have the required licensing from the governing body. It gets even more complicated. Given that cryptos are not real monies. The regulations concerning them are not that clear:
Legality by region:
Taking part in online gambling in the United Kingdom is quite easy, owing to its legality. Some systems ensure that the players do not get duped by the sites operating in the region. As long as a site has licensing from the UK Gambling Commission, it is good to go. Before that, only companies that could advertise their services were able to operate in the UK. Having these clear regulations is a plus and a miss, depending on how you look at it. You see, many operators flock the UK market as there are many provisions for operations. These large numbers, in turn, create an attractive market for gamblers who get spoilt for choice. On the downside, there are high tax rates that may dissuade some operators. Regarding cryptos, as long as an operator has a license from the United Kingdom Gambling Commission, operations can commence.
The United States
Unfortunately, the laws surrounding digital currencies in the US are not as clear as those in the UK. And that brings about a lot of confusion. For a long time, operators carried on their service provision in the country. However, after questions arose regarding the Wire Act of 1971, the situation changed. People were unsure if the terms contained therein pertained to online gambling. You see, the act came into play to make interstate telephone gambling an illegal practice. At the time, the World Wide Web did not exist, and the act did not refer to online gambling.
The passing of the Internet Gambling Enforcement Act in 2006 further increased the confusion. While it did not outlaw online gambling, it made it illegal for banks and other traditional institutions to process transactions between these online sites and US residents. This move created the notion that it was illegal to gamble online. As such, many sites moved their activities away from the US, restricting citizens from this country from accessing their services. After all, nobody wanted to lose their license. The sites that remained argued that as long as they had licenses from regions where online gambling was legal, they were on the right track. To date, many people believe that the use of gambling sites is not illegal, hence a large number of US players on these sites.
Over the years that followed, more legislation came into play. Some states legalized online gambling and issued licenses to operators who wished to provide similar services. Others have debated the issue while others are on track to legalizing such activities.
However, even so, federal law states that participation in online gambling is against the law. Even if someone starts an offshore casino online, they cannot accept bets using fiat currencies from US citizens. The situation has become quite complicated, even affecting bitcoin casino operators. Operators have resorted to blocking US IP addresses in the hope of avoiding legal tussles. That said, some still accept US players who are willing to bet using cryptos. Again, the legal point of view regarding online gambling in the country is quite unclear.
Australia & New Zealand
Interactive Gambling Act of 2001 covers all laws regarding online gambling in the region. It states that offering some gambling services to residents is illegal, only allowing sports betting and lottery games. In recent years, the Northern Territory Racing Commission outlawed online crypto wagering.
The Gambling Act of 2003 covering New Zealand states that residents can work with offshore sites when taking part in some forms of online betting and gaming. The laws prohibit some of these forms in companies operating in the region.
With more than eighty countries having legalized online gambling, there is a light at the end of the tunnel regarding cryptos. Even in the US, where the laws are pretty unclear, some states such as Nevada allow online gambling. The best way forward is to understand what applies in your case and ensure you are on the right side of the law.
If you are interested in the topic, do check my next article. In there I explain in detail how crypto casinos work.