Regulating cryptocurrency casinos, will it even be possible?
It is no secret that the use of cryptocurrency is becoming more popular with each passing day. But with cryptocurrencies being used more often comes a greater need for regulation in the gambling industry, particular among online casinos. But is it even possible? Are online casinos really up for the task?
While more online casinos are beginning to accept cryptocurrency on their sites, there are very few countries, and therefore websites, that actually regulate crypto gambling. According to Coin Telegraph, only a select few nations regulate crypto gambling: the United Kingdom, The Netherlands, Italy, Poland, Greece, and Belgium. In short, that means the best USA online casinos as well as popular online casinos in other countries have no set regulations for crypto gambling.
Fortunately, even though the list is short, the fact that there are a few countries that have made steps to regulate crypto gambling is a sure sign of hope that the regulation of cryptocurrency casinos as a whole is, in fact, possible. But as interest in cryptocurrency and cryptocurrency casinos increases, so does the need for more significant and more strict regulations. Unfortunately, because cryptocurrency is still somewhat new to the average person, regulators have seemingly fallen behind.
Quick Explanation of Cryptocurrency Gambling
For those less familiar with cryptocurrency gambling, there are a few bits of information to know and understand. First, blockchain-based gambling, or gambling with cryptocurrency, typically happens in two ways: on-chain and off-chain.
Off-chain cryptocurrency in gambling, refers to an online casino accepting cryptocurrency, most often Bitcoin (BTC), as a deposit method. On-chain cryptocurrency is more complicated. According to Investopedia, an on-chain transaction occurs when the transaction is “validated and authenticated by a suitable number of participants… and broadcasting of the necessary information to the whole blockchain network.”
It sounds pretty complicated to the average user, but the main thing to understand is that it is much easier for governments to monitor off-chain casinos. For example, if someone in the United States tries to access a cryptocurrency casino, they will most likely be blocked. However, on-chain casinos sometimes use workarounds to grant otherwise restricted users access. Hence the need for greater regulation.
How To Regulate Cryptocurrency Casinos
As reported by Coin Telegraph, the Japanese House of Representatives passed the Payment Services Act and the Financial Instruments and Exchange Act, which include new crypto asset regulations. Japan’s crypto gambling industry is still bound by strict gambling regulations. However, this shouldn’t come as too much of a surprise given that it was only one year ago, in 2018, that Japan passed a federal law allowing physical casinos in the country.
Given that the gambling industry is still somewhat new to the country of Japan, cryptocurrency gambling isn’t nearly as prevalent in Japan as it is in other countries across the globe. Yet they are still taking steps to regulate crypto gambling with the understanding that not doing so could have disastrous effects.
In the United Kingdom, the UK Gambling Commission allows gambling with bitcoin so a fair number of online casinos accept cryptocurrency. But to operate legally, those sites must follow the UK’s current gambling laws. But that’s part of the problem; while the UK may have regulations for cryptocurrency as part of their gambling restrictions, there are no standard regulations across the online casino industry.
Numerous countries across the globe have begun mentioning cryptocurrency in their gambling regulations and restrictions, but the nomenclature is anything but consistent.
One would think that effective regulation would be consistent, regardless of the site the player is gambling on or the city they are playing in, similar to how online casinos use casino bonuses to draw in new players from across the globe. Unfortunately, keeping regulations consistent and up to date isn’t as easy as maintaining up to date casino bonuses.
Perhaps that is the solution: to come up with a regulatory body dedicated to creating and monitoring the regulation of cryptocurrency and cryptocurrency casinos. There already seems to be a regulatory body for nearly everything these days, so why not develop one that is dedicated to an aspect of international culture that is only growing in popularity with each passing day?
The main takeaway from this, many believe, is that just as cryptocurrency shouldn’t be treated the same as traditional currency, regulating it should be an entirely separate ordeal. Unique and clear-cut regulations need to be put in place and then monitored consistently to control crypto gambling, given its ability to create a unique set of problems for online businesses.
Cryptocurrencies are here to stay and the need for regulation only becomes more apparent. As more cryptocurrency casinos hit the scene, the need for consistent, international, strict rules and regulations will continue to grow.