What makes online gambling “illegal”?

To be clear, the legality of online bitcoin gambling isn’t very clear. For starters, there is no “global” authority which has jurisdiction and the laws of different countries see online gambling in very different ways. Some countries outlaw gambling outright, while others regulate online gambling through licensing of casinos.

Other than playing at a regulated site, a good starting point for the individual gambler is this: the laws of your country regarding online gambling should apply to you, followed by the laws of the country you are playing from.

Less pertinent to the individual gambler – but of importance – is the laws governing the casino you are gambling at. For example, it may be legal for you to play at Casino A, but always check to see that Casino A is legally allowed to take your bets, or dispute over payouts could put you on the losing end.

How does the legality of online gambling affect Bitcoin casinos? Aren’t they the same thing?

Some people call Bitcoin a disruptive technology simply because it disrupts the norms and understood rules regarding finance. The introduction of Bitcoin casinos have certainly disrupted the already murky area of online gambling legality.

For example, online gambling is technically illegal in most of the US  (with the exceptions of casinos regulated by the states of New Jersey, Nevada and Delaware). But the law that makes it illegal pertains to the US Wire Wager Act, which makes it illegal to use electronic wires (including Internet) to transmit currency as bets. This means US players technically can’t play at an online casino based outside the US either.

However, many countries have yet to determine how it views Bitcoin: is it simply an asset or is it also currency? If a US person mines Bitcoin on his computer, then bets it at a Bitcoin casino, it’s uncertain if he’s actually breaking the law.

So… Bitcoin casinos are not illegal?

Yes, and no! By nature of Bitcoin and its current exclusion from conventional law, Bitcoin gambling is not illegal. However, regulated online gambling is a lot more than the legality of currency and ensuing tax issues. Regulated and licensed casinos also means that there are authorities who do constant checks to ensure that casinos are fair and that they pay out to players and staff, for example.

2014 was a great time for Bitcoin gamblers. Young, usually namess and faceless entrepreneurs launched hundreds of gambling sites or casinos accepting only Bitcoin. The problem is that very few Bitcoin casinos are regulated. In fact, virtually all casinos or gambling sites accepting only Bitcoin and other cryptocurrency are not regulated.

This means that if the casino owners suddenly decide to up and go or cheat on their fairness of games, there was next to nothing the players could do about it. And this has happened.

So should I stay away from Bitcoin casinos?

Ultimately, that’s a decision for you to make. Serious gamblers would probably only want to play at regulated and licensed Bitcoin casinos for the security of funds and payouts. In the unlikely event of a legal battle, it’s highly improbably for you to be able to take a bitcoin casino to court.

On the other hand, there are a lot of benefits at playing at Bitcoin casinos these days that you won’t find at traditional ones. These include: transparency on house edges, independently verifiable provably fair mechanisms, micro-betting (you can bet 1 satoshi at many places, which is currently 1/1000th the value of USD0.01) and participating in the house bankroll.

Remember, Bitcoin is a disruptive technology and is all about (pseudo) anonymity, transparency and decentralization. You’ll find the communities, owners and staff at Bitcoin casinos to be very knowledgeable and keen to build upon a trust system fostered within itself.