One of the most asked questions from those looking to try out the many benefits of blockchain technology is whether Bitcoin gambling is legal. The topic is quite complex in nature, not least because it revolves around two independent issues – currency and gambling. This article will attempt to explore the legal status of Bitcoin and whether it is suitable for online wagering.
What is Bitcoin?
First and foremost, to understand how governments view Bitcoin, it is important understand some of its key characteristics. In layman terms, Bitcoin is a digital representation of money that has the ability to act as both a medium of exchange and a store of value. Created in 2009 by an anonymous developer known only by his pseudonym Satoshi Nakamoto, the underlying technology is decentralized. This means that it is controlled by no single person(s) or authority, nor is it backed by any central bank.
Unlike fiat currency, it is not possible to control the supply of Bitcoin. Instead, new coins are issued on an incremental basis, generated by the assistance of miners. In return for helping validate and verify transactions, miners are rewarded with additional Bitcoin from the newly released supply. This supply will reach a maximum quantity of 21 million, after which no more coins will be issued. Every time a new movement of funds takes place, it is automatically posted to the blockchain, which is a like a giant accounting ledger.
Is Bitcoin Legal Tender?
The aforementioned features and benefits distance Bitcoin from its fiat currency counterparts. Although it could be argued that they perform similar functions, it is the lack of governmental control that makes it unique. Its cryptographic nature ensures that the entire network is immutable from attack, malpractice or error. Although Bitcoin is close to surpassing its first decade, a universally agreed definition is still wanting. Different nations view the technology in different ways. For example, the Japanese administration have completely embraced Bitcoin, treating it as legal tender and regulating it in the same way as its financial services industry.
In this sense, the Japanese have legitimized it. On the contrary, China has all-but outlawed cryptocurrency usage, preventing the banking industry from having any relationship with it. As a result, many exchanges of high-throughput have subsequently had to move their operations offshore. Then you have regions such as the U.S and the E.U that are somewhere in the middle. The former seems to be finding it difficult to ascertain whether it is a currency (like dollars) or a commodity (like gold). Such a definition is important, as it determines if or how it can be taxed. The E.U. seem contempt to view it as a form of currency, however any form of stringent legislation confirming this is yet to be produced.
What about gambling laws?
Much like in the case of Bitcoin, gambling regulations vary from nation to nation. The U.S. have a very hardline approach to online gambling, whereby it is illegal in most individual states. However, gambling legislation is fairly relaxed in the E.U, with the two leading licence issuers located in the U.K and Malta. Nevertheless, in response to the recommendations of the Financial Action Task Force, whose role is to help governments defeat money laundering and terrorist financing on a global scale, it is near impossible to find an online fiat casino that does not request a full identity check.
Known as KYC (Know Your Customer), players must submit countless amounts of documents such as a passport and bank statement, to ensure they comply with regulations. However, the key point here is that these measures are only implemented because fiat currency is involved. As we mentioned earlier, there is a significant distinction between Bitcoin and fiat currency. In fact, the true definition of fiat currency is that it is not backed by any tangible asset such as gold, and that it can be printed at a central bank’s will. Bitcoin is not backed by any central bank, which means it is not classed as a fiat currency. In the world of online casinos, this is huge.
Is Bitcoin Gambling Legal? You bet it is!
So that leads us to the crucial point of the day. Bitcoin gambling is 100% legal! To clarify, as Bitcoin is not classed as real-world money, it can be used to deposit, stake and withdraw funds through a crypto casino. One thing to consider is that some operators specifically mention that they do not accept certain nationalities, so it is well worth checking this before you get started. However, the interesting thing is that the vast majority of online Bitcoin casinos do not ask you to submit any personal information.
Most commonly all you will need to enter is your email address. This means that if you decide to open an account anyway, there is no link between to your real world identity. Furthermore, if you live in a jurisdiction like Malaysia where all gambling content is prohibited, you can easily circumvent these restrictions by using an anonymous browser. Again, this is up to you, however you will have no issues doing this as the Bitcoin network is anonymous.
Rest assured, once you start using a Bitcoin casino, you will notice a plethora of benefits such as:
- Withdrawals that take minutes, not days
- No need to send in lots of documents to verify your identity
- Cryptographically generated games to ensure 100% fairness
- And much more! If you would like to read all about the benefits of crypto casinos, read my guide here!