When you look at the stated advantages of cryptocurrency – the speed of transactions, the internationality of the concept, and the low cost of use – they seem to mesh well with what online casinos and sportsbooks are trying to do. Given this seemingly obvious synergy, it would make sense that betting with crypto should appeal to a broad audience. Yet a quick search around the most popular gaming providers in any market, whether in the US or elsewhere, shows a marked lack of providers offering crypto as a means of deposit or withdrawal.
Where does this divergence between what is expected and the reality come from? In truth, there are a few reasons, and we’ll explore them as we go on. But with a definite market for the growing industry of US real money casinos, it is worth being open and honest about a few facts; facts which remain constant whether a user is pro- or anti-crypto. Taking those facts into account, it might not be too much of a surprise that casinos are, for the moment, reluctant to accept cryptocurrencies on the same level that they take fiat currencies.
The first reason is banking
Banking is a complex issue for any betting provider for a number of reasons. There is the sheer volume of money that changes hands through a bookmaker at a given time, which introduces an element of enhanced security. There is also the need for strict screening given that this high volume makes betting an attractive proposition for people seeking to launder money. And when casinos and sportsbooks are arranging banking software and infrastructure for their sites, there is a tendency for crypto to raise alarm bells, increasing the number and extent of checks that need to happen. In other words, it’s more convenient to not allow crypto to be used in online casinos.
Regulation is a key issue
Be prepared, the following paragraph will contain at least one use of the phrase “legal gray area”.
Cryptocurrency is not widely regulated at present. Because it is a very new means of making and accepting payments, it does not have much of a history and there does not exist a broad consensus as to how it is treated. Different governments in different countries may see it as a digital asset, a currency, a store of value or anything else. So while crypto is traded internationally, there is not an international regulatory framework for dealing with it. This leaves casinos in a legal gray area, as crypto coins are largely unregulated, making it hard for casinos to know what their legal position is when accepting them and paying them out. Aware of their need to operate legally to retain a license, casinos will often back away from crypto.
Time will clarify the picture
For now, there are various obstacles to online casinos accepting Ethereum and Bitcoin, and the crypto gambling community is therefore led towards specialist crypto betting sites. A willing crypto bettor may find more luck with casinos headquartered in Malta, a jurisdiction with extensive regulation concerning both crypto and betting, where gambling is a leading industry. As time goes on, it is expected that more legislation will emerge in more regions and that a certain amount of harmonization will take place between jurisdictions. It’s not going to happen overnight, but time is how a consensus develops, so waiting may be in the best interests of casinos looking to change their stance on crypto.
David is a crypto enthusiast and an expert in personal finance. He has created numerous publications for different platforms. He loves to explore new things, and that’s how he discovered blockchain in the first place.