Can you remember the days when casinos didn’t accept crypto? Me neither and it feels weird even thinking about it considering how expected and normal it is today. We have now enjoyed the freedom cryptocurrency brings for over a decade, but is there trouble lurking in the crypto waters?
While the sun continues to shine on our beloved crypto casinos, there are some speculations out there regarding how things might change going forward. The thing lurking in the waters is spelled regulations and it might throw us a curveball not all of us have expected.
New regulations are circling crypto casinos
The Rise of Crypto and Regulatory Concerns
Because of the crypto boom and the massive effect it has had on online casinos, there’s no doubt it has attracted the attention of regulators worldwide. Although many of you may view this as a party-pooper, it’s important to understand the potential impact and why this is happening in the first place.
Let me paint you a picture: you’ve been knocking off one big win after another and already making plans about what you’ll do with all the money you’ve won. Boom, a message pops up on your screen saying: “Warning – Withdrawals exceeding X amount requires KYC verification.” What the f**k?
The Importance of Anonymity in Crypto Gambling
One of the biggest advantages with using crypto is the anonymity that comes with it. After all, quick and discreet transactions are a dream these days but there are always two sides to every coin. The regulators work really hard to keep the online gambling space clean and this causes a certain level of concern.
Stake was blocked in France in 2021
Real-World Example of Regulatory Action
A few years ago, the gambling authorities in France decided to block 281 domain names and made sure to make an example of the two biggest crypto casinos, one of them being Stake. The issue being that gambling with cryptocurrency is not permitted in France, due to concerns about fraud, money laundering and the financing of terrorism.
The Licensing Loophole: What You Need to Know
Wouldn’t the fact that Stake has a license help sort things out? Well, this brings us to an area where things tend to get a bit tricky. Clearly there are some vigilantes out there without a proper license but the majority of the crypto casinos have no problem showing us theirs.
Do players take a closer look at licenses and examine them? Eeh, no! But what would it show if you did? Some would call it a big ol’ mess, full of loopholes.
Here are 3 popular licenses for crypto casinos.
Malta Gaming Authority
Malta
Malta for example, used to be the superstar of gambling licenses. If you’ve ever visited the island, you’ll quickly become aware of the overwhelming number of casinos residing there. It’s not weird considering its location and the appealing tax breaks offered. It hasn’t always been smooth sailing though, especially during the last few years. Some not so flattering news stories have brought some negative attention and vibes around the Maltese gaming license.
Curaçao Gaming Licensing
Curaçao
Then there’s the very popular Curaçao license which is pretty much option numero uno for crypto casino operators because it’s both fast and cheap. Those two are also two big reasons why some critics refer to it as a “participation trophy” and not a license worthy of its name. Others complain about the fact that the rules and regulations are not exactly strongly enforced and audits might take place once in a blue moon.
Costa Rica Gaming Authority
Costa Rica
A third license is available in Costa Rica, or is it? Well, it’s in the eye of the beholder I guess because if you choose to register a company there, cough up the $9,900 registration fee, and you’re good to go. Why did I say “or is it”? Well, there’s no actual regulatory body in Costa Rica that will make sure you stick to the rules. You thought Curaçao sounded like the Wild West?
Shady Operators and the Dark Side of Crypto Gambling
No matter how much we love our crypto and expect all operators and all players to live by the rules, it’s no secret that the digital coin evolution also brings along some shady behavior. In order to give you some proper examples, I came across a gaming site sharing the thoughts of the Asian Racing Federation (ARF) on the topic. I know I know, it was an unexpected source for me as well.
However, they do have four good points worth looking at.
- Goodbye Fiat: Cryptocurrencies are making for an alternative to traditional means and methods of payments; in effect, this makes it difficult for authorities to track transactions and identify suspicious activity.
- Blockchain Bonanza: Some gambling apps are based on blockchain technology, thereby further obscuring the transactions and creating a whole new layer of complexity for regulators.
- Agent Provocateur: Crypto facilitates the transfer of funds to betting agents outside the regulator’s framework. This allows them to bypass AML and consumer protection measures.
- Wash, Rinse, Repeat: It’s no wonder that anonymity in cryptocurrency makes it tailor-made for laundering profits from illegal gambling operations. Money can be rushed around quickly and is anonymous, making it next to impossible for any authority to track money flows.
Do I see why regulators have a tough time not only figuring out how to safely regulate crypto gambling but also in a way that we as players and operators can accept? Absolutely!
How Increased Regulation Could Benefit Crypto Casinos
I do apologize if I scared you in the beginning with the exaggerated KYC example but I had to get your attention. Now that I have it, what might a future of crypto casinos look like when the regulators eventually decide to really put its foot down?
I don’t think we should be all too concerned. I mean after all, I think all of us want to operate in a safe environment. An increased regulation might even boost player trust and confidence, which is worth a lot. Being able to trust that your favorite crypto casino operates under a strict framework of laws and regulations is something I think is necessary.
In the long run it should also give players that much needed feeling of security and knowing you’re being treated fairly. This should be able to help attract more crypto players that are on the fence because they don’t fully trust casinos yet.
Also, hopefully stricter regulations will be able to help get rid of all the rogue operators that only care about making money and couldn’t care less about their players. Yes, they do exist!
Potential Downsides of Regulation
On the other hand, some of the negative sides of regulations could be if it results in higher costs for operators. As we know, if the cost goes up, the ones paying it in the end are the customers, in this case the players. It may come in the form of higher fees or other more creative ways. Another downside could be that it forces some operators to have to throw in the towel. All in the way of “survival of the fittest”.
The ability to remain anonymous is perhaps the biggest reason for many to use crypto as they play. This might be at risk, depending on what the potential regulations will demand from us. Should this become the case and players would need to share more personal information, it could easily result in the loss of X number of crypto players.
The future of Crypto Casinos
Looking Ahead: The Future of Crypto Casinos
Just from what I’ve shared today, it’s clear that the road ahead could end up getting a bit bumpy. I believe it’s important to keep a positive attitude and have some faith that it will all turn out fine. With any new regulatory changes comes operators looking for loopholes and we all know our industry will do exactly the same. Surely the operators that are the most innovative will be able to get ahead of the competition.
Hopefully we will end up with some sort of hybrid model where we can enjoy our beloved blockchain technology that is safe from shady operators looking for a quick buck.
In the end, the industry will adapt like we always do but until we know what the crypto casino future will look like, my advice to you is to stick to reputable casinos with a license AND know how to treat the players.
Lucky for you I have a whole list of them for you right here.
Enjoy!
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