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When it comes to cryptocurrency, quite a number of things are still in the gray, from whether cryptocurrencies are securities or not to whether they can be considered legal tender. This is because industry regulation is still in its nascent stage, and regulators across different territories seem to be at a loss about how to deal with this fast-growing digital asset class.
Regardless, cryptocurrencies have found use cases in different areas of life and have revolutionized how we transact in certain spheres, including gambling. In response to the growing use of crypto in gambling, countries have started regulating the sector in different ways.
In this article, we will examine the different ways crypto laws vary around the world and why these laws are necessary in the first place.
What is Crypto Gambling, and Why Are Crypto Gambling Laws Necessary?
In simple terms, crypto gambling is the use of cryptocurrencies such as Bitcoin, Ethereum, and DogeCoin, among others, to place bets and gamble online. Crypto gambling covers various gaming activities, including poker, sports betting, lotteries, and casino games.
Crypto gambling is a unique intersection of two industries where government interference is necessary. The gambling industry is regulated to protect regular citizens from losing money to organized scams and to generate revenue for the government.
On the other hand, cryptocurrencies are considered assets, and regulations are necessary to protect investors against scams and market manipulations and prevent illegal activities such as money laundering and financial terrorism.
Cryptocurrency has garnered the attention of many, particularly gamers who use it in online casinos because it provides a fast alternative to traditional banks. As ReadWrite KR editor MisoLee stated in her article, coin casinos utilize the characteristics of cryptocurrencies to provide faster and safer transactions than traditional casinos.
Coin casinos ensure gamers' anonymity and privacy and allow for fairness and transparency when placing bets. Proper regulation helps ensure that all gaming platforms do not compromise their customers' safety.
How Do Crypto Laws Vary Around the World?
The legal landscape around crypto gambling varies across different countries and regions. Here are some of the ways they differ:
The United Kingdom
The United Kingdom has one of the most favorable regulatory climates in the world for gambling. Gambling of all kinds is legal in the UK, including land-based and online casinos, lotteries, horse and greyhound tracks, and betting shops. The UK also has a strong community culture built around gambling, as there are period gaming exhibitions and expos in the country.
However, this is not to say it is the Wild West out there. The UK has a strong regulatory body responsible for licensing and overseeing operators' activities. The UK Gambling Commission (UKGC) issues licenses, oversees the industry and ensures that operators adhere to strict standards, whichever form of payment they accept. Crypto gamblers in the UK enjoy a relatively safe and legal environment in which to place their bets through crypto casinos as long as they use a licensed platform.
The United States
While the United States leads the pack regarding cryptocurrency regulations and has made cryptocurrency entirely legal, crypto gambling is still a huge question mark. Gambling in the US is entirely within the purview of states, meaning that gambling laws vary from state to state. While some states permit online sports betting and have banned online casinos (e.g., Maryland), some states prohibit all forms of gambling (e.g., Utah and Hawaii).
US residents in states where crypto gambling is not permitted often turn to offshore casinos that allow US citizens to play. U.S. laws do not regulate these platforms, so while players can access them, there are no protections or guarantees. And because the majority of these sites do not require KYC verification, they have appealed to security-conscious individuals who are aware of the risk of cyber-attacks and data breaches.
Canada
The provinces largely determine Canadian laws on gambling. Each province has the authority to regulate gambling activities, and several provinces have embraced online gambling. However, when it comes to crypto, the legal framework is still a work in progress.
For now, Canadians can gamble with cryptocurrencies as there is no law prohibiting it, but it’s important to use reputable, licensed platforms. Hence, Canadians have the option of crypto gambling on offshore sites or on licensed online casinos in their provinces that accept crypto.
China
In contrast, crypto gambling is illegal in China as all forms of crypto transactions are prohibited in the country. Cryptocurrency exchanges and trading platforms are also banned. But it is not just crypto that is banned in China; gambling as an activity is also prohibited (except in Macau), meaning that there is very little regulatory gray area or wriggle room for Chinese players to exploit.
Korea
Korea is more accommodating in its laws in that it allows foreigners to gamble both online and offline. Locals are not allowed to participate in any form of gambling, even though there are some land-based casinos in the country. These casinos are supposed to cater to foreigners only. However, crypto gambling is still generally illegal even though cryptocurrencies are explicitly not considered illegal.
Malta
Malta is every gambler’s dream. Malta allows all types of gambling in its territory, and it is one of the major gambling hubs globally, with gambling as a major income stream. It has legalized all kinds of gambling, and that includes crypto gambling.
The MGA (Malta Gaming Authority) regulates gambling on the island and licenses both local and offshore operators. Its headquarters operate outside Malta. Malta is one of the first countries to take a definitive and proactive approach to crypto in gaming.
One way the country did this was through its sandbox framework that allowed existing and remote gambling operators in Malta to test their blockchain-based products within a controlled setting before releasing them to consumers.
Italy
Italy takes the cake as the first EU member to legalize online casinos at the legislative level formally. Gambling in Italy is legal and well-regulated in a way that does not stifle legal gambling activities.
However, the situation is less clear when it comes to cryptocurrency. Italy does not explicitly ban crypto gambling. While Italy allows a wide range of online gambling activities, including sports betting and casino games, crypto gambling is not yet explicitly regulated.
