Online casinos and even well-known Las Vegas establishments are starting to accept Bitcoin and other cryptocurrencies, and this is a trend that will likely continue in the future.
The Two Forms of Crypto iGaming
Crypto iGaming, for the most part, takes place in two ways: on-chain and off-chain.
Off-chain cryptocurrency iGaming involves online casinos accepting cryptocurrency, mostly Bitcoin (BTC), as a deposit method into an online casino account. These establishments will often use a third-party custodian, such as Bitbay Pay, to convert Bitcoin or another cryptocurrency to a local fiat currency. There are online casinos that purely operate without fiat denominations, though, and payout in Bitcoin.
On-chain iGaming occurs on a blockchain via smart contracts that comprise a decentralized application (Dapp), which has a backend code running on a blockchain network instead of traditional centralized servers.
Coinsaga Bitcoin Casino is committed to providing the ultimate gaming experience, Coinsaga is not only providing the best off-chain iGaming but is also well on the way to delivering multiple on-chain games.
The Current Regulatory Situation Globally
In many countries, Bitcoin is not considered a legal payment method under existing guidelines, therefore it also should not be used in iGaming. However, more clarity on that matter is needed in many countries. Japan is perhaps the most notable example where the iGaming industry is not as such permitted, but yet turns over an estimated $15.8 billion each year.
While most countries have official regulations in place regarding online iGaming, only a handful of nations regulate crypto iGaming. They include the United Kingdom, Italy, The Netherlands, Greece, Poland, and Belgium.
There is little coordination among global regulators. Yet collaborations like the Group of Seven (G7) and the European Union (EU) may pool their ideas and bring some regulatory standardization across Europe and within the largest economies.
In the U.K., while the iGaming Commission allows Bitcoin iGaming, numerous online iGaming platforms and service providers accept cryptocurrency. Cryptocurrency-oriented service providers must adhere to the existing iGaming laws active in the United Kingdom. There, sports betting is an extremely popular activity, having grown into a £700 million industry.
The UK iGaming Commission allows iGaming using Bitcoin and a number of online iGaming platforms accept cryptocurrency. However, all must follow the UK’s existing iGaming laws. There are also a number of cryptocurrency-using sports betting websites in the UK and the regulators will license online cryptocurrency casinos. So too will iGaming regulators in Curacao and Malta. There are many cryptocurrency casinos registered in these locations.
Cryptocurrency iGaming in Japan isn’t as prevalent as one would think given the country’s track record of implementing cryptocurrency regulations early, which is perhaps due to its experience with the collapse of Mt. Gox, a Japanese-based crypto exchange that went bankrupt in 2014.
Japan has very strict rules regarding iGaming and the same applies to crypto iGaming. Yet, Japan passed a federal law in July 2018 that allows physical casinos in the country. Japan will open up its offline casino license to major players after the Olympics. It is uncertain who will receive licenses for Tokyo, Osaka, Okinawa, and Hokkaido. We believe online casinos will follow only after offline casinos start operations.
In Italy, There are currently 120 licenses of this kind available, and there are approximately 40 licenses ready to be issued to businesses already operating in the Italian market that need to renew their existing permits.
The licensing covers all types of gambling activities, such as casino games, slots, bingo, sports wagering, horse racing, virtual sports, fantasy sports, esports, and more. Operators might have to wait sometime to acquire a license, as the pending period is between 90 and 150 days.
In the US, established Las Vegas casinos are beginning to accept cryptocurrency, but regulatory amendments in the US are slow. Online casinos drew much scrutiny after Black Friday and are recovering their reputation. More US states are starting to legalize online iGaming, but with little support for online casinos, cryptocurrency casinos are likely to see little favor in the US in the near future.
Yet, the benefits provided to players by cryptocurrencies cannot be overlooked. Bitcoin provides a degree of privacy, though not anonymity. At Coinsaga, no personal information is transmitted when conducting a Bitcoin transaction, but a person attempting to convert BTC to fiat must be identified in most countries because of know your customer (KYC) and anti-money laundering regulations (AML).
On the other hand, privacy coins such as Monero (XMR) and Zcash (ZEC) give their users a greater amount of identity protection and, although less widely accepted than Bitcoin, are known to impede law enforcement’s investigative abilities. Something not seen favorably by authorities.
Despite the numerous regulatory and technical challenges faced by crypto casinos, the world’s iGaming industry is becoming increasingly friendly to cryptocurrency. However, should authorities decide to regulate against them, crypto casinos could vanish very quickly. The best solution, therefore, is to work with regulatory bodies to attain iGaming licenses through proper means and by meeting their regulatory demands.
At Coinsaga we believe what casinos need to do is follow a proper regulatory framework consisting of anti-money laundering mechanisms, know-your-customer rules and the like, and we will surely win the battle and emerge stronger.
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