The Legality of Crypto Casinos
The online casino market has seen massive growth as more new players were forced to go online in the past year to find new pastimes. This explosion in online casino gaming has also been boosted by the rise of crypto gaming, where players can buy crypto assets, such as casino chips, and play popular games without the need to use fiat cash. This has led to a changing legal landscape as lawmakers try to adapt to these new digital innovations. For instance, Texas and Alabama, where online gaming is illegal, forced casino firms to stop selling NFTs in the state as they funded virtual casinos. It was found that the NFT owners were entitled to a pro-rata share of profits generated by the online and metaverse casinos, which went against state laws. As the online gaming industry shifts to become more crypto-centric this has challenged the legality of crypto casinos in the U.S. and across the globe.
Crypto Casinos in the U.S
Online casinos are strictly restricted in the U.S. Only five states in the country legally allow online casino gaming: Delaware, Michigan, Nevada, New Jersey, and Pennsylvania. Despite this, these five states don’t include crypto-betting in their legislation which makes crypto-casino gaming technically illegal across the U.S. While technically illegal most crypto-sites don’t prohibit U.S. gamers, and those that do can be circumvented by VPNs. Alex Costello, the vice president of government relations at the American Gaming Association, told NBC News that “Unfortunately, federal law enforcement are a bit hamstrung, because these folks are obviously not regulated, not registered in the United States, and often not based in the United States, which often doesn’t allow for an easy prosecution.” While illegal in the U.S. crypto casinos are flourishing with players unlikely to be caught and prosecuted.
Crypto Casinos Outside the U.S
Casino players looking to play using crypto outside the U.S. have many more options. In the UK, crypto casinos are not technically illegal, although providers must get approval first to accept cryptocurrency. The Gambling Act hasn’t been updated to include cryptocurrency which makes the legality of crypto gaming a gray area. In order to protect themselves, no UK based casino platform directly accepts cryptocurrency, which means that players must look to outside providers to legally play with crypto. In Australia, the gambling regulator Northern Territory Racing Commission (NTRC) issued a ban against all cryptocurrency online casino wagering in 2018. New Zealand follows a similar stance, but does allow players to use overseas platforms in the country. For those who are concerned about the legality of crypto gaming in the country that there are in, it is best to check the local laws.
Increased Future Legalization of Online Casinos
The rise of crypto casinos has offered gaming companies a potential way forward through government regulation roadblocks. This is particularly true for online poker which was severely restricted by 2011’s Black Friday, which shut down major poker platforms in the U.S. As mentioned above, only five states in the U.S. have legalized online poker. Currently, the Interstate Wire Act of 1961 prevents casino sites from legally accepting online bets outside of certain jurisdictions. This makes it illegal for a bank to process casino winnings outside of the above states. As cryptocurrencies are acquired from a dedicated exchange or app, casino players don’t need to interact with the banks and therefore can potentially by-pass the Interstate Wire Act. While online casino laws are still strict across the country, the hope is that cryptocurrency will give lawmakers a chance to increase the legalization of online casinos without having to change the law too much.
Cryptocurrency is changing the gaming industry. For online casino fans, there is still a legal gray area in most countries. Yet the rise in cryptocurrency usage it could soon start reversing that and lead to a whole new worldwide form of gaming.
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