According to a JuniperResearch report, the online gambling industry is booming, with global gambling dollars expected to soar from $55 billion in 2016 to nearly $95 billion in 2021.
An important factor in the rise of the industry is the growing number of online gambling sites that allow customers to gamble with cryptocurrencies such as Bitcoin.
It is easy to see why these cryptocurrencies are so good for online gambling.
First, the medium of exchange has the ability to trade anonymously when used.
Second, cryptocurrencies are relatively easy to use and user-friendly when transacting, faster, and more simple compared to existing traditional methods.
From a regulatory perspective, online gambling with Bitcoin is a gray area of legal jurisdiction. Online gambling itself has different rules around the world: some countries have no restrictions, some choose to ban it altogether, and others have specific requirements for casino operators.
Today, almost every casino game can be played online, from the popular roulette, online poker, or blackjack to a variety of slot machine games, such as a monopoly or game of Thrones.
The UK Gambling Commission (UKGC) is the first body in the world to ask whether bitcoin gambling sites need specific rulings.
In August, the UKGC gave the green light to UK-licensed online casinos to accept Bitcoin as a method of deposit and cash payments but went on to say that it had reservations about further regulation, noting that the platforms could be used for money laundering.
The UKGC said: "Casino operators with a friendly attitude towards Bitcoin must ensure themselves and the commission in regulating money laundering, which is their obligation and social responsibility."
Earlier this year, the Isle of Man government said it was working to change its legal framework to ease restrictions on bitcoin gambling. Government officials have already made regulatory changes, "allowing the use of virtual money as if it were cash.
Currently, legal bitcoin casinos are licensed in Gibraltar, Costa Rica, and Curacao, which have several well-known online casinos, including the popular Anonymous Casino.
The legality of bitcoin casinos in the United States has always been a gray area. To be sure, bitcoin and other cryptocurrencies are not considered legitimate currencies. But there is also no law prohibiting U.S. citizens from gambling in Bitcoin casinos.
The Illegal Internet Gambling Enforcement Act (UIGEA), passed in 2006, explicitly states that "gambling companies are prohibited from knowingly accepting bets or related payments from other people engaged in internet-based gambling activities, and are under no circumstances recognized under federal or state law." This makes all financial transactions, from Banks to online gambling sites, illegal. It also prohibits credit card providers from offering any transactions with online gambling sites.
Both Russia and China ban online gambling for all citizens. China also bans its citizens from using bitcoin to gamble. Despite the law, Russia and China are said to have large numbers of online poker players.
The situation is not the same in Malaysia, which has also banned online gambling operators from offering services to Malaysians. Companies that ignore the ruling will be sued; Banks are also not allowed to make any transactions related to online gambling.
Turkey has also directly banned the operation of bitcoin gambling sites and domestic betting for all its citizens.
In India, with the exception of Maharashtra, there are no rules on whether bitcoin can be gambled. That means it is legal to operate and bet on bitcoin in casinos outside Maharashtra.
We are looking forward to seeing if Bitcoin will be allowed as a legal currency for gambling in more countries in the future.