Because Bitcoin and other cyber currencies have grown in popularity, especially in the area of online gambling sites, many online casinos around the world are accepting cryptocurrency for betting.
Despite all of the advantages of using cryptocurrencies, such as offering users greater transparency, fast payments with no or low transaction fees, and control of their money, it may come as a bit of a surprise that not everyone can use it to gamble online.
Only a handful of states allow for the use of cryptocurrencies like Bitcoin. In Las Vegas, for example, visitors who want to play slot games at a physical casino, for example, can use a Bitcoin ATM or transaction software like Bitpay with their digital wallets to convert their cryptocurrency to a form of legal tender recognized by the US Department of the Treasury.
Additional states which allow for regulated online gambling are Delaware, New Jersey, Pennsylvania, and casinos which have been established on Native American reservations within the US.
Since its creation a decade ago, the United States federal governments have had a long and tumultuous relationship with Bitcoin as well as other blockchain currencies.
In 2006, under the Bush Administration, Congress passed the Unlawful Internet Gaming Enforcement Act or UIGEA. This legislation made it illegal for banks to process payments, withdrawals, and deposits when it came to online gaming.
As a direct result of the passage of the act, nearly all online casinos listed on the London Stock Exchange stopped accepting US customers. At the same time, a few have remained committed to embracing technology and decentralized currencies such as Bitcoin.
Because cryptocurrencies can fluctuate wildly in terms of value and are mostly unregulated, the US, Syria, Iran, and, most recently, Japan, have put in stricter controls. The reason most often cited by governments throughout the world for the restrictions surrounds the issue of taxation.
Unlike cash, direct bank transfers, or credit and debit cards, cryptocurrencies allow users to maintain their privacy through the use of a digitized wallet.
Most Bitcoin casinos offer free and unlimited numbers of transactions by using peer to peer software applications.
Because such peer to peer connections are difficult to monitor; they have become extremely popular around the world. For those countries like those that do not allow gambling, or other countries like the US, which closely monitor monetary transactions of all types, the use of cryptocurrencies makes enforcement difficult.
Because casinos based in the US, whether a physical location or online, have strict rules that they must adhere to, the very private nature of cryptocurrency makes enforcement of the rules harder to monitor.
Rethinking Online Gambling Restrictions
In 2018, gambling worldwide brought in nearly $450 billion in revenue both in brick and mortar and online casinos. By 2022, that figure is expected to bring in an estimated $565.4 billion.
While virtual gambling will never fully replace physical casinos and gambling destinations like Las Vegas and Atlantic City, it does offer a broader range of possibilities for those who wish to play
Casino owners, global economists, and those who enjoy casino gaming all insist that it would be foolish not to take advantage of the economic benefits of cryptocurrencies.
Today, we are seeing increasing signals which indicate more states are beginning to relax their restrictions regarding online gambling.
The good news is that as Bitcoin and other cryptocurrencies become more accessible to use and gain wider acceptance, more people will push for it as an additional option to fiat currencies when conducting online transactions.
Enforcing the Rules
Even though users can access almost any part of the world from another via their computer or smartphone, most online casinos that accept Bitcoin will block the IP addresses of users to keep them from accessing the site illegally. When US visitors, for example, navigate to the website,
They will receive a popup message indicating that deposits for play have been disabled due to current government regulations. Visitors from restricted countries are further advised that accessing the site is illegal, except in the case of free-play games.
Through the use of a Virtual Private Network or VPN, technically proficient Japanese users have been able to work around the current government restrictions on using Bitcoin and other cryptocurrencies to gamble.
While governments tend not to pursue individual users who break the law, current statutes can and do go after gambling operations that offer online casino games to their citizens illegal.