Bitcoin and other cryptocurrencies aren’t a new phenomenon anymore having been around since 2009, but the application to use them as funds to gamble is more recent. There are now more crypto casinos launching each month for the past few years.
In the UK, there is a big debate on whether they are legal and whether or not they should be allowed to gamble online. We are going to look at this recent boom and see how it affects players in the UK and touch on how it has affected gambling around the globe.
Are crypto casinos legal in the UK?
Technically, they’re not illegal, but UK casino sites or betting sites that want to accept crypto-assets (as the UKGC calls them), must get it approved by them first. The main sticking point here is that it must be clear that anti-money laundering checks have been completed.
There is nowhere in the current Gambling Act to say that gambling with cryptocurrencies is legal or illegal so it’s somewhat of a gray area. The current Gambling Act came into power back in 2005 and hasn’t been updated since, which is why it’s currently being reviewed.
All the crypto casinos that you see online are licensed in other jurisdictions such as Curacao or Malta and don’t hold a local UK licence. Some of these black market operators will accept UK players, but that doesn’t mean that you should play there.
One of the arguments against this is that licensing for crypto casinos follows the same way as traditional online casinos. The only difference is that crypto casinos accept Bitcoin, Ethereum, and other cryptocurrencies as payment methods.
The UKGC has also published a piece on crypto assets that lists additional requirements for operators offering games of chance to players using crypto assets.
Will the Gambling Act review add legislation for crypto casinos?
Probably not. Anything to do with crypto is a hot topic at the moment and that includes how the government can stop money laundering. The UK Gambling Commission is looking into how the current gambling legislation might apply to crypto casinos in the UK, but it’s doubtful that new specific crypto legislation will be included in the Gambling Act review.
In a recent consultation paper, the commission says it would like to gather information on how people view cryptocurrency-related gambling. This information will help get an idea of how the UK public is using crypto and would help answer the question of whether the government should regulate it or not.
The review of the Gambling Act will cover all aspects of gambling in the UK. This includes land-based casinos, traditional sports betting, and online gaming. This is not only to make sure there is adequate player protection set up but also, to ensure that operators have a clear framework for when it comes to running their business legally. The regulator could also argue that using crypto to gamble could harm player protection as these digital assets can fluctuate aggressively potentially resulting in big losses for those that store their money in crypto. This is one of the reasons why the UKGC asks to be involved with all earnings that came through third parties that accept crypto.
The UKGC even fined In Touch Games for accepting a payment provider that also acts as a cryptocurrency exchange. It was rumoured that this was Revolut but wasn’t confirmed by the Gambling Commission.
The UK gambling regulators are constantly reviewing new technologies and innovations to ensure that they do not disrupt fair play or encourage criminal activity. They want to make sure all gambling regulations remain fair and effective. This is by having a single set of rules for everyone involved.
As we said, gambling with cryptocurrency in the UK is a bit of a grey area. There have been fines handed to operators accepting funds from payment providers that also act as exchanges. But, then the UKGC states that licensees can accept funds that have come from crypto-assets.
What we do know is that there isn’t an online casino in the UK that accepts any cryptocurrency directly. It would be hard to find out where this money originated and this is why we don’t believe there will be new legislation regarding crypto after the Gambling Act review.
With that happening this year, we’ll soon see what the outcome is.