In six states, gambling on the internet is illegal in the United States of America. The stringent rules that govern internet casinos make it difficult for players to transfer funds between casinos and other players.
These guidelines need to be more helpful when it comes to bitcoin.
Internet casinos that offer users the chance to play with cryptocurrencies are booming, sidestepping regulations while operating and advertising with near impunity. Numerous websites outside of the U.S. now provide a way to begin gambling quickly, many of which have no checks on users’ backgrounds.
“This segment has exploded quickly in a short time and, as a decentralized structure, is making it harder to figure out how you go after them,” Alex Costello, vice president of government relations at the American Gaming Association. This trade association is lobbying for U.S. casino and sports betting companies registered in the United U.S.
“We are a highly regulated industry for a good reason: anti-money-laundering concerns, responsible gaming concerns,” Costello added.
Gambling addictions are often due to the absence of preventive measures. One gambler who spoke with NBC News but asked not to be identified said cryptocurrency casinos don’t offer the same addiction-mitigation features as traditional gambling facilities, such as being able to ban yourself.
“I’d tried everything locally to stop myself from doing it, and suddenly it was like a Hail Mary,” he said. “I could self-exclude 20 times, and it wouldn’t be a problem since you could return and create a new account.”
Online gambling has seen a significant increase in popularity in recent times, both in the U.S. and overseas. Sports betting online is now legal in 22 states and Washington, D.C. Online casinos licensed to serve Americans not from the United States, must be registered in every state they operate. They also often try to confirm the authenticity of customers’ physical addresses. They take deposits through banks or credit cards per federal laws to stop money laundering.
They are also in a growth phase of their own, with companies jockeying to sell bitcoin, ether, and a range of other digital assets. According to a recent NBC News poll, one in five Americans has invested in, traded, or used cryptocurrency.
Similar success can be seen in crypto casinos. Offering all kinds of games at casinos, these sites often take typical payment methods like credit cards in addition to bitcoin and ether. These can be used on virtual versions of slot machines and roulette. NBC News surveyed all the crypto casinos, and none of them is based in the U.S. This makes it hard for oversight by the government.
“Online gambling that’s not linked to a wider criminal network has been viewed as a lower priority given the government’s limited resources,” said John Holden, an assistant professor at Oklahoma State University who studies gambling regulation.
The situation could change as cryptocurrency casinos grow. Chainalysis, a blockchain analytics company, conducted a study and found that about 70 crypto-friendly casino operators are currently operating. They have received $2.8 billion this year. Chainalysis discovered that the industry made $10 billion last year, an increase of 64% over 2020.
There isn’t a state in which gambling is permitted.
“To the present, no state has allowed gambling directly with cryptocurrencies,” Holden said.
Crypto casinos can be found on the internet by doing an online search.
Platforms such as Twitch and YouTube are filled with influencers encouraging users to visit specific gambling websites that take cryptocurrencies and with instructions on how to utilize the virtual private network to access websites that prohibit players from particular countries. Several U.S. media companies have promoted the ranking of the top cryptocurrency casinos by encouraging sponsored content on their websites, including Orlando Magazine, Men’s Journal, and TheStreet.com. Many of those websites specifically ban Americans from betting.
Many of these sites need to make more effort to ensure the regulations are followed. Some websites require only an email address for registration, which allows users to transfer cryptocurrency into their account and play immediately.
Many casinos either need to verify where customers are visiting from or are accessed by anyone who uses a VPN to direct their internet connection through a different country.
Costello said the American Gaming Association has raised concerns with the U.S. government but has not had any luck.
“We’ve been in contact with federal law enforcement officials and state law enforcement regarding this subject,” Costello said. “Unfortunately, federal law enforcement agencies are a bit hamstrung because these folks are not licensed, not registered or regulated in the United States, and often not located within the United States, which often doesn’t allow for an easy prosecution.”
According to Keith Whyte (executive director of the National Council on Problem Gambling), Crypto casinos can be especially risky for those suffering from addiction issues to gambling.
“Crypto gambling is just adding risk to risk,” Whyte said. Therefore, they need to be regulated and are likely to operate with less or no consumer protection.
NBC News spoke with a gambling addict who said that the crypto casinos led the addict to return after having cut down on gambling before. When he realized he had an issue, the service let you stop yourself from playing at any licensed casino or sportsbook. However, he continued to watch gambling videos online, stake and through their advertisements, he found out about cryptocurrency casinos as a way to get around to the block. To feed his accounts, he began to buy cryptocurrency legally.
It wasn’t just that there was no way for him to stop; he said that the websites didn’t have any safeguards that typically hinder gamblers from making gambles of wild nature.
“It might not be that beneficial if you’re caught on gambling. But it’s the fact that there is a potential stop in the middle,” he said. “Whereas the cryptocurrency casinos do not take any interest in the matter. They aren’t concerned about the whole world.”
The addict claimed he had quit gambling and had tens of thousands of dollars of debt. He then admitted to his family members that he had an addiction.
He added, “Something must be done to address this. However, it’s the crypto sphere.” What can you do?
