The legislation in the area of Bitcoin gambling is very immature and leaves a lot of space for speculation. Operators starting their online casinos that will accept Bitcoin are often confused by controversial facts and ambiguous decisions of authorities in regards to the cryptocurrency. Desiring to operate their business in a legal way, they try to find out if offering gambling services for Bitcoin is legal, whether a Bitcoin casino needs to be licensed, and players from which countries can be accepted.
Key facts on Bitcoin gambling legality
Although there are no clear answers to the questions above, there are some key points which may help an operator make the right decision:
1) There are no specific laws regulating Bitcoin gambling. It is neither officially allowed nor prohibited.
2) Attitude of different authorities to Bitcoin is rapidly changing, but most governments are still not referring to Bitcoin as to real currency. If it is not a currency, rules regulating fiat currency casinos are officially not applied to Bitcoin gambling websites.
3) In countries where gambling is strictly prohibited, like the United States, authorities may still take strong measures against Bitcoin gambling websites and gamblers who make wagers with Bitcoin.
4) Bitcoin gaming websites offer the benefit of anonymity to players. It makes it hard for the authorities to trace gamblers.
5) Many reputable gambling jurisdictions already issue licenses to Bitcoin casinos (Curacao, Isle of Man, United Kingdom), which means that they accept the responsibility of controlling operation of cryptocurrency websites. As long as the casino is following the rules and regulations of the chosen jurisdiction, it operates legally.
Should a Bitcoin casino have a gambling license?
A gambling license is mainly needed for the business to apply for a bank and a merchant account, to work with electronic payment systems, and to use gaming content from some of the well-known providers like Microgaming. When the website is working with Bitcoin, all of the payment processing is performed internally, with no third party services involved (SoftSwiss custom crypto-payment infrastructure). Deposits and withdrawals are transferred almost instantly with Bitcoins moving between the player’s and the casino’s wallets. Thus, the necessity to present a gambling license to any financial institutions or external payment providers is eliminated.
On the other hand, players perceive a Bitcoin casino in the same way as any traditional online casino. They want to be sure that they bring their savings to a reputable and secure online resource and that their rights are protected by an independent authority. In this case, a gambling license from one of the jurisdictions may become an important marketing tool, contributing to player loyalty and increasing customer retention.
To be on the secure side and rule out any potential risks connected to illegal business operation, it is advisable to follow gambling laws applied to fiat money casinos in your jurisdiction. SoftSwiss can provide professional consulting and support in the area of Bitcoin casino operation.