The laws on crypto gambling are constantly changing and evolving to keep up with innovations in the industry. The activity is popular all over the world, thanks to the potential financial gains and exciting gameplay that it provides. Before partaking in cryptocurrency gambling, it’s important to know its legality in order to play safely and fairly.
The first thing many will look for to determine the legal status of crypto gambling is legislation. The confusing thing is – there is no written law on a federal level relating to it. What we do have is regulations on online gambling in general, which can then be applied to gambling with digital currency. For example, in US states such as New Jersey, Connecticut, or West Virginia, online gambling is entirely legal, which also makes the crypto version easier to access. In contrast, states like Utah or Hawaii have banned all forms of gambling, so one can assume that crypto gambling will not be as easily accessible.
There are some parts of the world where cryptocurrency is in the beginning stages of growth. For example, the South Korea crypto exchange, Upbit, saw a phenomenal rise of 42.3% in trading volume in recent years. Alongside an interest in digital currencies is an increase in the number of people in South Korea playing crypto casinos, with more people than ever using their crypto coins to place bets (source: https://www.techopedia.com/kr/gambling/best-crypto-casinos).
Despite crypto gambling clearly being popular globally, there are only a handful of countries with formal regulations on the activity. One such country is the United Kingdom, where any cryptocurrency company, such as a casino, must comply with pre-existing gambling legislation. In order to standardize and monitor crypto, the UK government has issued advertising laws and regulatory bodies to make sure any cryptocurrency gambling is conducted fairly.
Although at the moment there are not very many crypto gambling laws worldwide, there are indications that regions will implement some in the coming years. A big priority for many will be the question of crypto taxation. In some countries, like the US, winnings from crypto bets are subject to income and federal tax, whereas in other places like the UK and Australia, winnings are tax-free. An interesting case study is El Salvador, which made history when its Bitcoin Law came into effect in September of 2021, officially making cryptocurrency legal tender in the country, being the first to do so. Any Bitcoin profits that investors make in El Salvador are exempt from capital gains tax.
New gambling laws surrounding crypto seem set to come into place soon in Canada. Thought of as fairly strict when it comes to the use of digital currency to make bets, the country seems to be becoming more open. In 2022, a new iGaming initiative was introduced, which set out to establish a new gaming market and make gambling safer for customers. In addition to this, a bill was passed in 2021 to relax some of the rules on sports betting. Each of these steps is paving the way for a more forward-thinking and open crypto gambling industry.
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