In the United States, gambling is one of the largest industries driving its economy. Several states have regulated the use of gambling for generating federal revenues. In 2008, the US gambling activities raked in more than $90 billion in revenues, according to the American Gaming Association. Despite accruing revenues in multi-billions, gambling in the US is legally restricted. And the latest addition to these limitations is the illegality of Bitcoin gambling. The status of Bitcoin gambling in the USA has been considerably debatable. At one end, the Bitcoin cryptocurrency is completely legal in the county. At the other end, there is quite an ambiguity on the legal use of Bitcoin in specific industries, such as gambling. The IRS continues to monitor this cryptocurrency closely and keeps updating its guidelines on Bitcoin for taxpayers.
As of 2020, the gambling community in the USA has been interested in the popularity of Bitcoin. This digital currency has been surging in value over the past year. The Bitcoin market’s volatile growth is perhaps the main factor why people would consider replacing their traditional fiat currencies with cryptocurrencies. Bitcoin transactions are also accepted at online arenas for gambling and lotteries, which further drives the demand for Bitcoin casinos. However, some serious flaws in this cryptocurrency are creating legal discrepancies for Bitcoin gambling in the country.
What is Bitcoin Gambling?
Bitcoin is new to the world of gambling and casinos. As the world’s most popular cryptocurrency, it is a viable option for transactions such as betting, leveraging, and trading. The blockchain technology induced in Bitcoins makes them secure and traceable financial assets. Some online gambling businesses transact only in Bitcoins. In 2020, almost every other online casino is accepting them as alternatives to traditional currencies. Besides online casinos, Bitcoin transactions are also on the rise at the table games of actual casinos. This year, the number of online casinos offering their games and gambling services in Bitcoin currency has increased significantly. These casinos are now being operated from different parts of the world, especially in countries where Bitcoin and other cryptocurrencies are properly regulated.
Bitcoin gambling is subjected to the laws imposed on conventional gambling practices. It is also subjected to the regulations that limit or control the use of Bitcoin for gambling transactions. Through these transactions, an online casino offers different options for the players. The bets made with Bitcoin money are being accepted by a variety of games. Casino games such as blackjack, poker, and roulette can be played by replacing money with Bitcoins. Such gambling is also applicable to online lotteries, spread betting, and sports-based betting.
What is a Bitcoin Casino?
A Bitcoin casino is an online gambling arena, where players can participate in gambling games and lotteries using Bitcoin as a currency. The primary currency of a Bitcoin casino is a cryptocurrency, which is why it is held illegal in many countries. The lack of a proper regulatory framework for these digital currencies makes a Bitcoin casino infamously unregulated. These casinos, however, are popular for being anonymous and covert. They tend to pull millions of players by offering multiple online casino variations. A Bitcoin casino is also known to offer welcome bonuses to new users. It not only drives the adoption of cryptocurrency but also helps sustain it with unlimited transactions and zero transaction fees. The daily transactions in a Bitcoin casino are speculated to impact the happenings in the crypto markets significantly. Despite remaining ethically gray, a Bitcoin casino has emerged as a breakthrough online casino segment.
How Bitcoin Gambling Works
In modern-day gambling, the software is at the heart of online games and gambling businesses. This holds true for Bitcoin gambling as well. The world’s best online casinos are packed with large user bases. These casinos run their proprietary gaming software, which helps players and the house function together. Such software is also used in online casinos that use Bitcoin for transactions. The software allows a player to make deposits and withdrawals in Bitcoins. Some online gambling sites have customized features that offer rewards to the players with this cryptocurrency. From free spins and welcome bonuses to real money rewards, the live dealer at these online table games offers the use of Bitcoins at different levels of the games.
As the software conducts and runs the game, there is no error induced by human intervention. Hence, the transactional data of these games is secured thoroughly. In these games, there are multiple players engaged, and the software acts as the live dealer to conduct the game. The entire game is conducted digitally; however, this creates fairness concerns regarding these online casino games. The users speculate their operations and are unable to trust Bitcoin casinos at face value. They demand the software to reveal its algorithms. Some players may trust online gambling sites based on a peer-to-peer reference. The uniqueness of Bitcoin gambling depends on the trust these casino games can foster. Among these games, poker is one of the most reliable and popular games at Bitcoin casinos.
Is Bitcoin Gambling Legal in the USA?
Like traditional gambling, Bitcoin gambling is also subjected to several legal stipulations. In the United States, the legal status of Bitcoin casinos is quite unregulated and controversial. As the volatile nature of Bitcoin’s value creates challenges for the gambling economy, running a Bitcoin casino is pretty much illegal in the US. That does not mean that the players in the US are unable to take part in Bitcoin gambling. These casinos can be operated legally through online gambling sites headquartered and incorporated outside of the US. Interested players from different parts of the world, including the US, can join these sites and gamble with Bitcoins. This creates an even bigger challenge for US authorities to control, regularize, and legalize Bitcoin gambling. The transactions conducted at such an online casino are not subjected to the US regulations. The lack of information on these anonymity-based businesses disables the authorities to track and prosecute these incorporations. The type of data created by any online casino cannot be subjected to a country’s law enforcement.
Since the arrival of Bitcoin casinos, there has been a favorable impact on the cryptocurrency markets. Bitcoin transactions are booming, and millions of dollars worth of stakes are transacted through this cryptocurrency at every online casino. Publicly available information is not sufficient to assess the transactional details, but the impact caused by bitcoin casinos is quite impressive. Some limited information indicates that the launch of the world’s first Bitcoin gambling site in 2012 increased the total number of daily Bitcoin transactions by five times. Despite being anonymous and illegal in the US, the world of Bitcoin gambling made rampant growth in the past decade. Today’s reality reflects that online gambling sites have their rights reserved in offering casinos and gambling services through Bitcoin transactions.
Cryptocurrency Regulation in the USA
Unfortunately, the regulatory landscape for cryptocurrencies in the US is still unclear. Finding a consistent legal approach is challenging as cryptocurrencies have not yet been legalized as functional financial assets in the country. Every state has its law governing the exchanges of these digital currencies. Federal authorities and state laws tend to dissect each other, which further increases the confusion. The Financial Crimes Enforcement Network in the US does not consider Bitcoins and other cryptocurrencies as legal tenders. In 2013, it did make a change in its consideration by approving that crypto exchanges are money transmitters when subjected to their jurisdiction. Based on the value of those tokens, these cryptocurrencies are now observed as the equivalent substitutes for currency.
The Internal Revenue Service marks a contrasting take on cryptocurrencies, regarding them as property. It issues tax on these transactions, which further dilutes the regulatory mainstay on cryptocurrency exchanges. These regulations contradict each other and create an uncertain legal environment. Multiple federal regulators in the US are claiming jurisdiction on the crypto transactions. Major regulatory bodies such as the Securities and Exchange Commission are also interested in capturing cryptocurrencies into securities. In March 2018, the Commission proposed applying the securities laws on these digital wallets and crypto exchanges. On the other hand, the Commodities Futures Trading Commission in the US considered adopting these assets by describing Bitcoins as commodities. This Commission has allowed the public trading of cryptocurrency derivatives as commodities.
When it comes to the sale of cryptocurrency, it is only regulated when it constitutes selling a security under a Federal or state law or considering money transmission under state conduct. This makes the seller a money services business under US Federal law. Due to the overall ambiguity, the US Justice Department strives to coordinate with these securities and commodities commissions. The future of cryptocurrency regulations needs to be more effective towards consumer protection. Today, it is not appropriately streamlined, and there could be multiple regulatory oversights. The US Treasury fears further uncertainty as the surging Bitcoin markets have compelled an urgent need for steadfast and absolute crypto regulations in the US. The Treasury bids to control the domestic and global criminal activities involving cryptocurrencies by exploring the marketplace comprehensively.
Be it in the gambling industry or any other industry; these exchanges must comply with the Bank Secrecy Act. They must follow the guidelines recommended by the Financial Action Task Force. The Internal Revenue Service must consider omitting these assets as properties under their tax authority. If federal regulators continue fighting on who oversees these exchanges, the US market for Bitcoins and other cryptocurrencies will stay unregulated.
The Status of Bitcoin Gambling in the US in 2020
In 2020, new restrictions were introduced by the US Treasury Secretary on Bitcoin gambling. The use of digital currencies through US consumers on online gambling sites are now imposed with stricter rules. To prevent suspicious transactions, Bitcoin transactions are being heavily monitored. The Immigration and Customs Enforcement is applying a new method for tracking unlicensed cryptographic activities conducted online. The proposed Cryptocurrency Intelligence Program is set to be completely implemented in 2021. According to this program, new rules are being imposed to set requirements that declare a tax reporting system for adopting blockchain technology.
In March 2020, the major economic slowdown caused by the COVID-19 pandemic affected the US in its legal stance on cryptocurrencies. The authorities now believe that these digital currencies can help the population if regulated properly. During these difficult economic times, the US government allows crypto investors to take part in federal programs that can help recover the country’s economy. CashApp, a crypto application accepted at several Bitcoin casinos, is now being adopted through federal approvals. Cryptocurrencies are no longer prohibited in the US. They may still need more to get integrated into the US financial structure. Some major market regulators are eliminating investors’ attempts to register Bitcoin as a financial and tradable asset. In mid-2020, the U.S. Congress viewed a bill on the digital dollar response to the COVID-19 pandemic. This bill disappeared quickly, disrupting the trust of crypto investors in the US government. Even today, the integration of cryptocurrencies in the US markets is at a standstill.
Scope of Bitcoin Gambling in the USA
Despite the growing popularity of Bitcoin casinos, the regulations on their operations in the US are at a status-quo. It is still illegal to set a Bitcoin casino in the US. For Bitcoin casinos incorporated outside the US, their revenues continue to grow tremendously due to the participation of US-based players. High rollers from the country are placing big buy-ins to capture their stakes. The gamblers are getting attracted to the rewards earned from free spins or a welcome bonus. Bitcoin adopters are actively conducting transactions for reaping advantages of zero transaction fees, unlimited daily transactions, and global access. Traditional casinos are unable to compete with these online casinos. At almost every Bitcoin casino, players are available in large numbers. Like a conventional casino, a Bitcoin casino is running around the clock. The casino is hosting a variety of online games. Many of these online games are customized under the casino’s laws. These variations, which are not allowed in a traditional casino, are attracting more customers to a Bitcoin casino.
The negative impact of this popularity is the downfall of traditional online casinos. To make sure they stay in business, the conventional online casinos are also offering handsome rewards through free spins. A welcome bonus offered by these casinos is not exactly attracting the online gambling community. But, it is still giving these casinos the leverage to compete with Bitcoin casinos. Under the defined regulations, a traditional online casino is now enabled with trackers to identify players, dealers, and casino operators. To tackle the digital nature of Bitcoin transactions, a traditional casino is guaranteeing big wins on card games. It is providing authentic shuffles and fair distributions. It is also protecting the player’s identity. A Bitcoin casino is unable to adopt such fair business practices. It is becoming more questionable.
The Future of Bitcoin Casinos in the USA
Even in an era without Bitcoins, gambling would still not be allowed in several countries or states in the US. Similarly, the world’s best Bitcoin casinos may still stay illegal in the near future. In the US, their future is likely to experience several difficulties in their regulation and control. The aforementioned authorities in the US may keep fighting to get their control on crypto exchanges. Concurrently, a new parallel economy may take shape, providing a backdoor entry to the best Bitcoin gambling corporations in the US. These cryptocurrency-based casinos would make sure that they lure more players through their advantages, be it a free spin, a welcome bonus, the zero transaction fee, or no-limit daily transactions.
Bitcoin casino gambling will continue to be debated on ethical grounds. An unregulated Bitcoin casino is likely to increase the complexity in monitoring Bitcoin transactions. Tracking its operations can become more challenging. These gambling sites may have their rights reserved to carry out their operations at their discretion. Such a position would scramble the legal aspects, risks, and challenges of Bitcoin gambling in the US.
The post All You Need to Know About Bitcoin Gambling in USA appeared first on Times Of Casino.
Source: All You Need to Know About Bitcoin Gambling in USA