Crypto Casinos: A Decentralized Take on Online Gambling
While an amalgamation of gambling and DeFi might seem like a distant vision to most, crypto casinos have actually been a widely-used, popular reality for thousands of gamblers. Established in 2012 (3 years after BTC came into existence), the idea of crypto casinos has managed to stay an underground industry for well over a decade.
While crypto gambling is on the rise, it is also sidestepping regulations, making it a topic of debate among regulatory authorities and legalization advocates. Tag along to learn what a crypto casino is, how it works, and various countries’ stances on it.
Most things recreated in the crypto universe largely follow the same fundamentals as their traditional counterparts, such as crypto cards and crypto ETFs, with the differentiating factor being—you guessed it—the use of crypto.
Crypto casinos are no different. They are digital gambling platforms where instead of using fiat, players utilize crypto to deposit, withdraw, and wager their bets.
Players have to secure the crypto they wish to use in a digital wallet. Once that’s set up, they transfer funds to the casino’s native wallet according to their requirements.
Through this wallet, a user can place their bets and transact with other players in a variety of games, such as slots, blackjack, roulette, and more.
The extent of the legality of crypto casinos varies from country to country. Further in this article, the challenges of regulating the industry are discussed.
While countries like China and Singapore have not legalized these casinos, some countries lie in the gray area (read: uncertainty in regulations). This list includes countries like Australia. In many countries, however, crypto casinos are completely legal with certain regulations, like Japan, India, and the UK.
As with most things in life, crypto casinos have their fair share of advantages and disadvantages. While these apply to almost all crypto products, it is important to revisit them in order to weigh the outcomes!
- Fast and secure transitions: The main benefit of transacting using crypto is the elimination of financial intermediaries. With their elimination comes efficiency, ease, security, and most importantly—decentralization. Digital assets allow transactions to go through within minutes and are secured by blockchain technology, which makes them almost impossible to tamper with.
- Secure transactions: As previously mentioned, blockchain employs cryptography to ensure the removal of falsifications and fabrications that can often be encountered in traditional financial reports. This is a particularly attractive attribute for gambling.
- Higher payouts and more variety: In addition to being fast and secure, crypto casinos allow players to participate in a wider variety of games and receive higher payouts. They may also offer more generous bonuses and promotions, as well as lower fees for depositing and withdrawing funds.
- Anonymity: Using crypto doesn’t require one to reveal their personal identity. This can be particularly appealing to players who wish to keep their gambling activities private.
- Volatility: Readers of this article may already be well-versed in the volatile nature of crypto. Given the extremely volatile nature of cryptocurrencies, players in a crypto casino don’t just gamble in their games but also assume the price fluctuation risk of the very currency they gamble with.
- Legal limitations: Because crypto (and blockchain alike) is a largely unregulated market, there are uncertain legal variables that one has to consider before choosing to gamble in a digital casino. It’s best to do your own research and due diligence, as legal constraints vary from country to country.
- Variation in Internal Regulation: All crypto casinos have their own regulations and governance rules. This non-uniformity in casino regulations can cause users to be defrauded if they don’t pay attention to the different regulations of the casinos they choose to gamble at.
From a government’s point of view, crypto casinos pose a few challenges. The first one is the volatility and risk that come with on-chain gambling. While iGaming has erupted as a popular activity, the quantum of money that can potentially be lost cannot be ignored.
Moreover, the biggest challenge faced by the government in regulating the industry is taxation. This is where it becomes tricky because a crypto casino has limited control over the decentralized currency that is being used to gamble. It is hard for them to keep track of their own earnings, posing an obstacle to taxation.
Japan has recently inculcated strict crypto casino laws that order a rigorous check on all transactions taking place in a casino. This will aid in tax regulations. The UK is a close second to being a pioneer, as the UK Gambling Commission has also released advisories to inform users about the risks in crypto gambling.
Although other countries are yet to catch up, most believe that an obvious regulation that can be followed is that crypto casinos abide by the same rules that online casinos do.
All you need to know as an Indian interested in crypto casinos is that bitcoin gambling isn’t illegal and is taxable in India.
The crypto tax stays at a steady 30%. When it comes to regulations, different states have different stances. Online gaming as a whole is banned in Karnataka, Nagaland, Telangana, Andhra Pradesh, and Tamil Nadu.
However, online gambling is fully regulated in Diu, Meghalaya, Daman, and Goa. Some popular casinos in India include Vave Casino, Metaspins Casino, and Cloudbet Casino, among others.
Online gambling has seen a huge surge globally and especially in India over the past few years. With this has arisen an increased interest in crypto casinos.
While nobody can predict the future of the industry, experts and users firmly believe that with the increase in widespread acceptance of crypto and blockchain, crypto casinos will see a sure-shot hike in demand and popularity. After all, they do provide unparalleled overall efficiency and security while bringing decentralization to the entire process.