Blockchain technology is overtaking more traditional payment methods in a number of spheres, but the online gambling sector seems to be the first to fully embrace cryptocurrencies, and with new regulation expected from the MGA, another step has been made towards full acceptance of cryptocurrencies in online gambling.
What is Bitcoin?
A blockchain consists of a continuously growing list of records. These ‘blocks’ are linked and secured by means of cryptography, containing a cryptographic hash, a timestamp and transaction data. Since it is typically managed from a peer-to-peer network, it is much more resistant to modification and fraud. Once data has been stored in a block, it cannot be altered retroactively without altering subsequent blocks. The most famous cryptocurrency, Bitcoin is based on this technology.
Bitcoin has seen a skyrocketing popularity since its inception in 2009, and it is easy to see how online casino and Bitcoin or other cryptocurrencies, are a match made in heaven. The use of cryptocurrencies is relatively anonymous, transactions are instantaneous, and there is no middle man involved. In other words, perfectly suited to the needs gambling industry and its clients. That is not to say that online casinos have not faced certain challenges to implement cryptocurrencies. One of the main problems casino operators have faced in the past is that of legislation. All casinos where UK are recommended to play are regulated by the UK gambling commission. And, since cryptocurrencies are not regulated by the UK, EU, or any other national or international governments, legislators have been reluctant to licence cryptocurrencies on gambling platforms under their jurisdiction.
This of course, has not stopped dozens of Bitcoin casinos from popping up, many operating from areas with dubious legislation, or simply with no legislation at all. This means that there is no government institution regulating the quality, pay-out percentage, or fairness of the games. Playing on these unlicensed casinos is simply not recommended, as players simply cannot know if the casino they are playing on can be trusted with their hard-earned digital treasure.
This is all about to change however. In December 2017, The Malta Gaming Authority (MGA) has announced its interest in regulating Distributed Ledger Technology (DLT) and cryptocurrency projects. In a statement on their website, they called for all parties interested in these two markets to apply for test projects that would allow safe and reliable application of these two technologies. The aim is to work out guidelines that will ensure consumer safety and fairness, while keeping in line with Maltese and international jurisdiction and ensuring no active contributions are made to funding international terrorism and money laundering. After test projects with various operators, the MGA aims to publish a list of guidelines and operating procedures in the first quarter of 2019.
As the leading regulating institution of most online casinos operating in UK and EU markets, the MGA is taking a crucial step towards legislating and normalizing cryptocurrencies and DLT. This comes at a time when most online casinos are already based and operated from Malta, accounting for a considerable percentage of its GNP. At the same time, Malta is looking to attract even more business, and is trying to entice blockchain companies to its shores as well.
Use of Bitcoin In Online Casinos
Already, major operators like software provider Greentube and lottery website Lottery.com have adopted Bitcoin as a payment method, offering Bitcoin lotteries, slot games and even live casino to Bitcoin gamblers. Other providers are also developing specific content for cryptocurrencies, as well as adapting their existing content. This means that soon all game types and content that cash players now enjoy will we available to Bitcoin or cryptocurrency players as well. Even now, the list of casinos that accept bitcoin is only growing. CasinoPilot is one of the websites that lists safe, regulated Bitcoin casino site in UK that have best pay out options.
Other Popular Payment Options & Uses For Bitcoin
There are, however, other ways to play with bitcoin on a regular casino. Most casinos use common payment methods such as VISA, Mastercard and Bank Transfer, augmented with digital wallets such as Skrill and Neteller. For advanced players and professional gamblers, these digital wallets have become increasingly popular. The speed of transactions and ease of use are an easy explanation. But recently, there is an additional reason for using Neteller. Netteller has also smelled the digital gold and now allows you to deposit Bitcoins on your account, without any fees. The deposit is instantaneous. The Bitcoins will automatically be exchanged for a cash amount in the currency of your account, according to a variable daily price. Since most casinos do accept Netteller transfers, it will be no problem for players to transfer their funds to a casino account, their winnings back to their Neteller account. Of course, if you want your Neteller funds withdrawn as bitcoins, that is impossible. You will simply have to buy new Bitcoins with your Neteller funds, luckily, there are plenty of bitcoin merchants that accept Neteller.
The popularity of Bitcoins is not limited to the online casinos. Recently, Las Vegas land-based casinos have joined the Bitcoin bandwagon. Even though money laundering scares have so far prevented the Nevada Gaming Control Board from creating policies to govern Bitcoin and other cryptocurrencies in gambling, many Las Vegas casinos support cryptocurrencies. This support is still limited however, The D Hotel and Casino in Las Vegas, for example, accepts Bitcoin as a payment for hotel lodgings and meals, and has a Bitcoin ATM installed on its property. For gambling, however, a withdrawal must be made, and chips still need to be bought using old fashioned cash.
Money laundering scares, as well as taxation issues, are behind most (gambling) legislators’ aversion to cryptocurrencies. However, with the new rules soon to be set by the MGA, it is conceivable that most European online casinos will offer various cryptocurrencies with a few years. How these regulations will come about without affecting what makes cryptocurrencies attractive in the first place, especially the anonymity, remains to be seen. As soon as the MGA publishes its new guidelines for BLT and cryptocurrencies, we could see a host of Malta-based online casinos popping up with full legislation and player protection.