The cutting-edge concept of cryptocurrency-gambling combines two lucrative and increasingly high-growth markets, as the number of Bitcoin and Ethereum-backed online casinos continues to grow year-on-year.
However, the burgeoning market for crypto-gambling is subject to complex and variable regulations, which means that while some nations embrace this activity, others are looking to crackdown on it.
You can read this article to find out more, but we’ve also explored the ideas further in the post below while how UK regulations compare to those in place elsewhere in the world?
Crypto-Gambling Regulations – The Key Considerations in the UK Market
If we take a glance at the iGaming market in the UK, we see one of the most progressive and well-regulated entities of its type anywhere in the world.
This climate is underpinned by the progressive Gambling Act of 2005, which was rolled out by Tony Blair’s New Labour government and essentially deregulated the space as a way of increasing competition.
In more recent times, we’ve seen the UK Gambling Commission (UKGC) introduce more stringent regulatory measures to cope with the digitisation of the betting and wagering on these shores, while simultaneously countering rampant growth in the space and the increased use of unsecured payment methods such as credit cards.
However, Bitcoin gambling remains something of a grey-area within this space, as this sits neatly in a regulatory black hole where activity is neither prohibited or heavily monitored.
Still, the UK has blazed a trail for others to follow by at least introducing some regulations with regards to crypto-gambling, which are primarily focused on ensuring that crypto-oriented platforms must adhere to the same basic rules and guidelines imparted on more traditional casinos.
Beyond this, one of the main UK regulations revolves around the conversion of crypto tokens such as Bitcoins into an alternative fiat currency, which is part of the wider ‘Know Your Customer’ (KYC) guidelines aimed at preventing money-laundering and underage gambling in the UK.
Of course, many argue that this undermines the key benefits of gambling with cryptocurrency online, with tokens such as Bitcoin renowned for providing players with privacy and anonymity.
By using a real-time exchange rate to convert Bitcoins in fiat currency, however, players will be required to largely forgo their anonymity and essentially gamble using a more familiar payment method.
This also explains why the market is resisting emerging cryptocurrencies such as Monero and Zcash, as these entities offer users an even greater level of identity protection and therefore incompatible with the regulatory climate in the UK.
Of course, these regulations don’t necessarily protect players against the volatile price movements and trends associated with tokens such as Bitcoin, but they represent a foundation from which further guidelines can be introduced in the future.
What About the Regulatory Climate in the Rest of the World?
As we said earlier, the UK has blazed a trail for others to follow in the crypto-gambling market, with Italy, Greece, Poland Belgium and the Netherlands having taken steps to regulate this entity and establish themselves as sector leaders.
Outside of Europe, the regulatory approach undertaken by countries varies wildly, with those in the Latin American region currently maintaining a progressive outlook in this space.
Take Venezuela, for example, which has recently opened a land-based casino where all wagers must be placed using the country’s ailing (and controversial) ‘Petro’ cryptocurrency. This overturns a comprehensive gambling ban initiated way back in 2011, although it continues to be viewed with cynicism by experts and those in the media.
Interestingly, cryptocurrency isn’t as prevalent as you may think in nations such as Japan, particularly given this country’s track record of implementing crypto regulations earlier and proactively in the wider marketplace.
In fact, the formative months of 2019 saw the Blockchain network Tron block all gambling apps on its decentralised store as it continued to build what was referred to as ‘a truly decentralised Internet’. This trend shows no sign of abating either, and it may have something to do with the collapse of Japan’s prototype crypto exchange (Mt. Gox) which went bankrupt in 2014.
However, Asian regions and cities such as Hong Kong are moving towards accepting wider crypto innovations, with the authorities here having recently approved its first $100 million fund from Venture Smart.
This may ultimately lead to wider regulation in the crypto-gambling space, but for now, there’s no doubt that the UK and other nations in Europe are leading the way in terms of creating progressive markets.