Casino gambling on the internet in the U.S. is illegal in all states, with six exceptions, and is controlled by strict rules which make it difficult for gamblers to move money into and out of regulated internet casinos.
However, those rules need to be revised regarding bitcoin.
Internet casinos that allow users to play with cryptocurrency are growing rapidly, evading rules while operating and advertising without a problem. Dozens of websites used outside of the U.S. now offer an option to play online quickly, many with few checks on users’ backgrounds.
“This segment has seen rapid growth in a short time and, as a decentralized structure, this makes it difficult to determine the best way to go about it,” Alex Costello, vice head 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 States.
“We are a highly regulated industry for a good reason: anti-money-laundering concerns, responsible gaming concerns,” Costello added.
Gambling addictions often result from a lack of preventive mechanisms. One gambling addict who spoke with NBC News but asked not to be identified said cryptocurrency casinos don’t offer the same level of addiction prevention as traditional gambling facilities, for example, being able to ban yourself.
“I’d tried everything locally to prevent myself from doing it, and suddenly, it was like a Hail Mary,” he declared. “I could self-exclude 20 times, but it wouldn’t matter because you can return and make another account.”
Online gambling has greatly increased in recent years in the U.S. and abroad. The legalization of sports betting for online gambling is in 22 states and Washington, D.C. The casinos operating online outside of the U.S. and legally serve Americans must register with each state where they work. They often attempt to verify the physical location of their customers. By federal regulations, they accept deposits via bank transfers or credit cards.
The cryptocurrency market is also in a growing phase of its own as companies compete in marketing bitcoin or ether as well as several other digital assets. A recent NBC News survey shows that one in five Americans has traded, invested in, or used cryptocurrency.
Similar results can be observed in crypto casinos. They offer a variety of casino games and accept credit cards, as well as bitcoin and Ethereum. This can be used to play virtual versions of slots and roulette. The crypto casinos NBC News surveyed are outside the U.S., making government supervision difficult.
John Holden, an assistant professor from Oklahoma State University and researcher on regulating gambling, said that online gambling isn’t linked to a larger criminal network.
That could change as the cryptocurrency casinos market grows. A study by Chainalysis, a blockchain analytics company, found that about 70 casinos with crypto-friendly software are currently in operation and have received an estimated $2.8 billion in the first half of this year. Chainalysis found that the industry earned $10 billion last year this year, which represents an increase of 64% over 2020.
There is no state where this kind of gambling is allowed.
Holden declared, “to this point the present, no state has approved gambling directly using cryptocurrency.”
A quick lookup on the internet will make crypto casinos appear as another online service.
Platforms such as Twitch and YouTube have influencers encouraging people to play at specific casinos that take cryptocurrencies and with instructions on how to use a virtual private network to access websites that restrict players from particular countries. Sponsored content on the websites of various U.S. media companies, including Orlando Magazine, Men’s Journal, TheStreet.com, Mercury News, and many others, have recently provided rankings of the best cryptocurrency casinos. Many of those websites specifically ban Americans from betting.
Many of them use minimal effort to ensure the rules are followed. Some sites require just an email address to register, allowing users to transfer cryptocurrency into their account and begin playing immediately.
Many casinos do not check where users are coming from or are accessible to anyone using a VPN to redirect their internet connection through an unrelated country.
Costello stated that the American Gaming Association has raised concerns with the U.S. government but hasn’t had much luck.
Costello said he had spoken with federal and state law enforcement about the issue. “Unfortunately, federal law enforcement is somewhat restricted because they aren’t regulated or registered in the United States and often not situated in the United States. This often creates a challenge to pursue an easy case.”
According to Keith Whyte (executive director of the National Council on Problem Gambling), Crypto casinos could be especially risky for those suffering from addiction issues to gambling.
“Crypto gambling is just adding risk to the risk of gambling,” Whyte said. “They are not regulated, and consequently, they’re likely to be untrustworthy operators, with very little or no protection for the consumer.
NBC News spoke with a gambler who claimed that playing at crypto casinos caused him to relapse after having cut down on gambling before. After identifying that the problem was present and registering for a program allowing users to pre-emptively block themselves from gambling at any registered sportsbook or casino. He still viewed gambling-related content on the internet and, through their advertising, found out about crypto casinos to find a solution to the block. He then started legally buying cryptocurrency to fuel his accounts.
He said there was no method for him to stop, and the websites had no security measures to prevent gamblers from making wild bets.
“It may not be helpful if you’re on a gambling spree. However, it’s because there is a potential stop there,” he said. “Whereas when it comes to cryptocurrency casinos stake, they don’t care. They don’t care about the world.”
According to the addict, they claimed that he stopped gambling and ended up having tens of thousands of dollars in debt. He later admitted to his family members that he was suffering from an addiction.
He said, “Something must be done regarding that. However, it’s the crypto sphere.” “What could you do at the end of the day?