Cryptocurrency casinos are springing up all over the place, because of the popularity of using cryptocurrencies for online gaming, and because assets like Bitcoin are really perfect for this kind of online business.
Bitcoin gambling and other forms of crypto casino activity allow players to use decentralized digital assets to buy in, win or lose, and cash out, all without traditional bank verifications.
So what you need to know if you’re going to get involved in the wild world of Bitcoin gambling?
Here’s a bit of an introduction with some key tips about how to view this type of online gaming activity, and how to manage your funds as you continue to use crypto for wagering online.
It’s A Big Business
The gambling industry is estimated to be around $525 billion by 2022.
Within this enormous market, cryptocurrency is becoming a more significant part of the online gaming world, and it’s likely we’re going to see quite a large industry develop in the years to come. So that’s part of the context of how casino operators are building in Bitcoin and other crypto coins, anticipating a different financial future.
Different Types of Crypto Casinos
Here’s an important point – you should know that there are different types of Bitcoin gambling casinos that operate rather differently.
Some accept cryptocurrencies sort of the same way that a payment platform like PayPal accepts cryptocurrency – in reality, you’re dealing with a custodial program that takes the market price of a given cryptocurrency and often converts it to fiat currency, and everything gets tracked in a centralized way. You may never be touching or holding the crypto yourself!
Then there are those Bitcoin casinos off the beaten path where you’re supplying Bitcoin directly from your own digital off-line wallet and raking back your winnings into the same decentralized location. These are the more anonymous and less centralized Bitcoin gambling venues where the pros like to make their wagers.
Regulation in Bitcoin Gambling
In theory, every Bitcoin casino has to implement certain AML/KYC rules. That requires that transactions are not totally anonymous. While the platform might not have your actual banking information, because Bitcoin is decentralized and doesn’t require verification, the venues may still have to report certain kinds of identifiers to regulators, because they want to make sure that cryptocurrency isn’t being used for fraud or criminal transactions. This is actually critically important in the blockchain sector as a whole, and some pretty stark controversies have included some ad-hoc law enforcement on platforms, etc. It’s really not something to ignore.
Tax Issues
Let’s talk taxes.
Again, in theory, Bitcoin is not taxable in a decentralized form. The IRS doesn’t really have any way to track this cryptocurrency unless it’s being used in a centralized platform that does the KYC/AML data collection we talked about above.
However, the IRS demands that every person buying and selling cryptocurrency must report capital gains in their annual tax filing.
Make of that what you will.
Ease of Use
For casino operators, using Bitcoin as a gambling medium makes a lot of sense.
That way the casino doesn’t have to keep track of everyone’s bank account and try to move money the old way. Your Bitcoin or other cryptocurrency fits seamlessly into the idea of showing up at a digital gaming table, making your bets, winning and losing, and walk away with the resulting value. It’s easy and very streamlined in a digital sense. There’s not a lot of moving parts that have to be maintained like there would with traditional fiat currencies. People talk about “frictionless transactions” in describing how consensus-based assets work.
That’s some of the basics. Take a look at platforms like FortuneJack and other fun and secure Bitcoin gambling sites that combine Bitcoin use with provably fair gaming algorithms and more for fair, transparent games of chance.