Cryptocurrency regulation impacts gaming. In 2020, it’s pretty easy to find an online casino or sports betting site that accepts cryptocurrency. In fact, we could easily cite dozens of online operators who accept Bitcoin, Litecoin, Ethereum, Dogecoin and various other up-and-coming cryptocurrencies.

Many of these websites are popular among cryptocurrency enthusiasts and have good intentions. However, major iGaming regulators have not fully embraced gaming with cryptocurrency.

Most people involved with cryptocurrency know regulation is complicated. It also differs by jurisdiction. The problem is, currently, most major gaming regulators do not issue licenses to operators who accept cryptocurrency. This could change in the near future, as we will explain later.

A licence affords certain protections

First, the answer to some questions: Does a gaming site really need a licence? And, if so, does it matter where it comes from. In short, the two answers are “yes” and “yes”. It’s arguably possible to find an unlicensed casino that will treat you fairly, but a licence also means the operator must adhere to certain standards. For instance, there is an obligation for licensed casinos to separate players deposited funds from operational funds; meaning, you would get your money back if the casino goes bust.

The most important licence issuers globally include the UK Gambling Commission (arguably, the most important in terms of influence), Malta Gaming Authority and Gibraltar Gambling Control Commission. In places like Canada, it can depend on the regional jurisdiction. The United States, where there is a growing online gaming industry, bodies like the New Jersey Division of Gaming Enforcement and Nevada Gaming Control Board are among the most influential.

The point is that none of these bodies mentioned above offer licences to casinos that accept cryptocurrency. And, almost all of the world’s online gaming brands hold licences from the bodies mentioned above. So, if you wanted to deposit with Instadebit in Canada at www.casino.com, you could do so in confidence at a licensed site. For the moment, though, with cryptocurrency, you’d have to run the gauntlet of depositing at an unlicensed casino or one with no licence at all.

Regulator bodies exploring options

However, industry observers have detected a softening in the stance of these regulators. The MGA (Malta), for example, has launched a dual-phased exploration into the viability of regulated cryptocurrency online casinos under its jurisdiction. There has been a softening of the language used by the UKGC on crypto too. Basically, both bodies have changed from “never” to “maybe” over the last couple of years.

Perhaps the key question for many readers unfamiliar with online gaming is: Why don’t gaming regulators like crypto? After all, you can buy a coffee with Bitcoin. So why not play slots online?

The simple answer is transparency. Regulators want to know where funds come from. They have pushed KYC (know your customer) policies for years. This helps combat fraud, money laundering, and promote responsible gambling. Cryptocurrency, with its focus on decentralization, conflicts with these goals.

Cryptocurrency regulation impacts gaming. Yet, its adoption by gaming regulators is inevitable. It may not happen this year or next, but it will come. Player demand will soon be too strong to ignore. As we’ve seen, many popular crypto gaming sites exist. Players will look beyond sites licensed by major regulators.