Gambling is one of the many sectors starting to include cryptocurrency in its operations. However, several legal issues must be settled before playing in a crypto casino. That’s why this article will outline several legal frameworks from many countries across the world, which you must be aware of if you want to become a crypto gambler.

The global gambling industry is tightly regulated. However, this doesn’t mean it lacks innovation. The gambling sector is continuously coming up with new ideas to simplify the lives of its customers while still following local and regional laws. Crypto payment systems are one of the most recent innovations these platforms have included. Users from all over the world can now use virtual assets for gambling purposes instead of conventional money.

Nonetheless, all crypto casinos must follow certain rules to ensure their users’ safety. Keep reading to learn more about it.

Are Crypto Casinos Legal?

Crypto gambling isn’t regulated by any particular entity yet. However, this form of gambling is acceptable as long as cryptocurrency and online gambling are allowed in a particular country.

It is crucial to look into national and state laws, as certain types of online gambling are illegal in various states of the United States. Therefore, if a person attempts to use an online casino from one of these states, they will probably be banned and charged with a crime.

The majority of nations have already regulated crypto assets in general. However, this can also mean the prohibition or limitation of the usage of cryptocurrencies.

In summary, crypto gaming is currently neither illegal nor legal in many nations. Nonetheless, during the following years, this might change. Therefore, online gambling businesses should make sure they are up to date with all applicable laws.

Crypto Gambling in Different Countries

United States

The US’s federal law doesn’t have any sort of regulation regarding crypto gambling. However, it says that if anyone partakes in online gambling, it must be done through a properly regulated casino, or they will be regulated as a money transmitter.

On the other hand, each American state is free to enact its own laws regarding this subject. Nowadays, only a few states allow online casinos to operate freely in their jurisdictions, while the rest prohibit or restrict online gambling.

If they wish to have American customers, online gambling organizations headquartered outside the US must get the appropriate license to offer those services. Moreover, they will also need to ban the American states that don’t allow crypto gambling.

United Kingdom

Just like in the US, there are no crypto gambling-related restrictions in the UK Gambling Act.

The organization that regulates all types of gambling, including internet gambling, is the United Kingdom Gambling Commission. This organization issued some regulations regarding the usage of virtual currencies in the gaming sector in 2017. According to it, the option to exchange any in-game objects for cash or other valuable items implies they acquire a real-world value.

In the same way that casinos need a license for their clients to exchange chips for real money, they will also need one for their clients to exchange cryptocurrencies for fiat currencies or other valuable items.

Moreover, these regulations require users to be informed of any changes to the casino’s withdrawal and payment process.

All online gaming companies must demonstrate their ability to comply with these requirements and their commitment to social responsibility before using cryptocurrencies. This implies that these casinos must use reliable verification suppliers to maintain their licenses, which is why anonymous casinos aren’t recommended.

Canada

Due to its strict rules on local casinos, Canada is in an unusual situation regarding internet gambling. Each province in Canada is free to run and regulate gambling operations.

Although most provinces forbid online gambling, players can utilize international websites for these activities. Also, it is legal to trade cryptocurrencies in Canada.

However, these regulations could change, as an internet gambling industry called iGaming launched in Ontario in 2022. This hasn’t greatly affected the country’s regulations, but other provinces may try to follow Ontario’s example.

Businesses operating in nations where online gambling is legal should abide by all crypto and gambling rules and keep up with any new legislation.

Crypto Gambling Taxes

Depending on where you live, winning large sums of money when gambling can also mean paying large sums in taxes.

Until now, there aren’t any specific tax regulations regarding crypto gambling. However, there are detailed tax regulations regarding gambling and cryptocurrency trading. The money you must pay will depend on the transaction you execute. Some of the most common include the following:

Betting Tax

There is no precise guidance on cryptocurrency betting and how it would be taxed. Some argue that this counts as spending your cryptocurrency on goods or services, which is taxed on capital gains. However, you could receive nothing in return, but in these cases, you could write it off with no actual loss or benefit.

Winning Tax

There is also little information available on the tax implications of winning cryptocurrency. Nonetheless, there is a ton of advice on how to handle gambling profits, and it all depends on where you reside.

American gamblers usually have to pay federal and state fees, but most other nations don’t have to do this.

Selling Tax

You must pay Capital Gains Tax on all capital gains you get when selling your cryptocurrency wins. This is the difference in value between the time you purchased and sold your item.

However, the cost basis makes this a bit complicated for cryptocurrency gamblers. Your purchase price for your cryptocurrency is your cost basis. You may say that your cost basis for gambling wins is $0. Therefore, if you live in a country like Canada that applies the adjusted cost basis technique, all your cryptocurrency wins can be liable for capital gains tax.

The Bottom Line

Crypto gambling is extremely fun and a great way of potentially earning some extra money, but it has strict laws and regulations that you and the casinos must follow to stay in business.

Moreover, remember that these regulations can change at any time, so always keep an eye on the most current changes to avoid legal issues later on.