The gambling industry is becoming more regulated and licensed around the world. There are strict guidelines in place at most gambling authorities, which are there to ensure player safety. Customers of online casinos and betting sites can now play without fear of their data being collected and sold to third parties. However, as we move into the realm of crypto gambling and cryptocurrency casino platforms, the issue of regulation begins to become more complicated.
How Does Cryptocurrency Gambling Work?
Generally, blockchain-based gambling occurs in two ways: on-chain and off-chain. The off-chain cryptocurrency gambling industry includes both physical and online casinos that accept cryptocurrency. To convert Bitcoins or other cryptocurrencies into local fiat currencies, these establishments will often use third-party custodians, such as BitPay. It is possible to find online casinos that operate exclusively without fiat currency and payout in Bitcoin.
A decentralized application that runs on a blockchain network, rather than traditional centralized servers, is the basis of on-chain gambling on a blockchain. Off-chain casinos are much easier for governments to pursue. The IP addresses of certain countries are often blocked by crypto casino websites. Users from the United States will likely be banned from accessing Bitcoin-accepting gaming sites.
The Netherlands and Crypto Gambling
Only a few countries are taking steps to regulate cryptocurrency use in online casinos so far. Some of them, such as the Netherlands, are still trying to legalize online gambling and many companies have applied for a license. They aim to be a new market for online casino platforms and businesses. That being said, the best that users can get right now are minimum deposit casino sites, which allow you to play by depositing just a single euro. Given how the regulatory system in the Netherlands is still young, they don’t have laws that explicitly forbid gambling on crypto casino platforms.
This doesn’t mean that laws won’t change or that a better-defined protocol won’t be enforced at some point. As far as crypto is concerned, Dutch finance minister Wopke Hoekstra believes that regulation is more effective than banning it.
Crypto Casinos in Canada
Canada is still in the process of improving its sports betting scene. It was a big step for them to allow single-event bets. As far as casino gaming goes it’s still illegal to offer that service there, but Canadians are free to play on any foreign platform, as the gambling itself is not forbidden. Meaning, Canadians can play at 5$ deposit casino sites or even on platforms that allow crypto payments. However, they do have cryptocurrency regulations and they do not allow unregistered crypto exchanges. They recently established their own regulated crypto exchange, so if you need to exchange your winnings you must do so through these sanctioned channels.
Canadians, like many other countries, are partial to cryptocurrency gambling. A number of countries including Belgium, Italy, and Greece have started working on the regulatory framework for cryptocurrencies, but it still remains to be seen how successful their efforts will be.
Crypto Regulations in the UK
In the gambling environment, the UK government is one of the first to attempt to impose some regulations, but it is still not recognized as legal tender, so it continues to face difficulties. Back in 2016, the UK government did pass a law that allows UK gaming operators to accept cryptocurrencies. It was agreed that any player wishing to use crypto at a licensed casino would need to present the proper identification documents, concerning all the AML and KYC procedures. The identity of crypto users poses the biggest challenge.
Crypto Regulations in the USA
In the United States, the gambling issue has always been complex. According to federal laws, crypto gambling online is not technically prohibited. In contrast, US gambling sites cannot conduct financial transactions with American residents. The tax implications of crypto gambling occur because cryptocurrency is viewed as a commodity. Players can bet using Bitcoin, for instance, but the profits will be taxed.
Various laws in every state are constantly changing and are summarized here for general purposes. Accordingly, Bitcoin will always be deregulated and players will be able to gamble online using it, but a close eye should always be kept on any new laws.