UKGC Takes a Firm Stance on Cryptocurrencies in the Online Gambling Industry

Cryptocurrencies have been a pain point for many financial and gambling regulators worldwide. As one of the most respected regulatory authorities in the world, the UKGC has finally taken cryptocurrencies and blockchain into account in relation to gaming and betting.

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A “firm stance” of any British regulatory body often means just observing and discussing the matter, and that’s exactly what the UKGC has been doing. They have addressed cryptos and published a review outlining the advantages and disadvantages of such a payment method.

One of the significant difficulties recognized was the inability of many crypto-backed gambling businesses to provide information related to the funding source owing to the anonymity embedded in their nature.

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As a result, no crypto gambling offers have been available in the UK to date. Most such enterprises, including crypto casinos reviewed by, are licensed by offshore platforms. Fortunately, UK residents can still access them and use cryptocurrencies to play games and bet.

UKGC’s Current Stand on Cryptos

Cryptocurrencies and related technologies are still being observed and gradually introduced by the United Kingdom Gambling Commission, which is still a significant step forward compared to ignoring the issue. This move is part of the UK’s broader initiative to incorporate crypto assets into the country’s financial system, although more progress has yet to be made.

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According to the UKGC’s official guide on blockchain and crypto assets, the gaming businesses in the country have already expressed interest in crypto funding. Still, it’s important to note that the guide mainly deals with that issue rather than with players using cryptocurrencies as deposit and withdrawal options.

The current stand is that businesses can apply for a license if they provide verifiable proof of origin of crypto funding.

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License Applications Using Crypto Assets

The UKGC has received applications from businesses whose declared funding methods list crypto assets and profits made from investments in crypto assets. One such example is Initial Coin Offering (ICO).

In the crypto sphere, many projects are funded by offering a crypto asset to investors, and certain businesses applying for the UKGC license have resorted to this type of crowdfunding. However, the institution claims that such businesses have failed to provide evidence relating to the funding source.

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It’s important to note that the UKGC follows strict rules, as stated in the Licensing, Compliance, and Enforcement Under the Gambling Act 2005 Policy Statement and the regulator’s Statement of Principles for Licensing and Regulation.

But how does this work in real life? Essentially, if there was a property sale and those assets were used for funding a business, the UKGC would require proof that the property was sold, along with evidence that the money was in the relevant person’s bank account. This also applies to crypto funding: the UKGC needs proof for all assets used to fund a casino or other gambling platforms applying for a license. Naturally, things get complicated once cryptocurrencies enter the play, as anonymity is their essential feature.

In plain English, the UKGC has refused to give licenses to all casinos or other gambling businesses funded by cryptocurrencies. This is because it’s challenging to gather evidence to eliminate all suspicion that, for example, the funds are not related to criminal activities, which is a prime concern the UKGC has in this matter.

Responsibility for Third Parties

The guide issued by the UKGC cites Social responsibility code 1.1.2, which claims that all licensees should take responsibility concerning the third parties they are involved with.

In the context of crypto, all casinos licensed by the UKGC need to be accountable for their third-party partners and ensure they don’t have any challenges related to funding backed by crypto assets. For example, if a casino has a marketing partner, it needs insight into how that partner has raised funds, primarily if related to the gambling business.

In short, each licensee must perform due diligence to ensure that third parties comply with all UKGC regulations, including those pertaining to crypto assets and source of funds (SoF) assessment.

Technically speaking, the UKGC allows crypto payments in online casinos. Still, the platforms must submit various documents related to the payment method provider, the type of payment method, and how it was assessed via AML risk assessment. This also applies to payment options that act as third-party crypto payment providers.

Will Cryptos Ever Be Accepted in the UK’s iGaming Industry?

The UKGC covered crypto assets several years ago, but it was only a brief instruction on the points to consider when using these. However, little was done regarding cryptocurrencies and their introduction into gambling regulation in the UK.

Newer guides also don’t say much in terms of actually incorporating cryptos. However, they provide short explanations on how a licensee could add cryptos as a payment method and what they need to focus on.

The Treasury Committee has released a report on crypto assets, recognizing the main benefits and drawbacks of using them in the gambling sector in the country. For someone who has no idea how cryptos work, this document might be eye-opening, yet it’s just another iteration of what most already know.

That said, there is no indication of cryptos ever being entirely accepted in the UK’s iGaming industry. Traditionally, the UKGC keeps a close watch on every single aspect of the industry in the country, and crypto assets pose a challenge to that owing to their anonymous nature. As such, they will always be frowned upon by the UKGC.

On the other hand, they make many aspects of online gambling easier and more secure. Therefore, observing solutions from other countries, the UKGC might find a way to pull off a “dulce cum utili” and cautiously introduce crypto assets to the island’s gaming landscape.

However, this is expected to be a slow and somewhat painful process, especially from the perspective of a crypto owner looking to play at UKGC-licensed casinos.

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