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How BTC Gambling Functions Amid Regulation Efforts

Chris in Bitcoin & Cryptocurrency published on 11, August 2015

Repercussions of the Regulations

From a macro perspective, Bitcoin gambling is but a small fraction of the iGaming industry. This niche market, however, is among the key sectors that fuel the Bitcoin ecosystem. Therefore, a few changes within the Bitcoin markets can significantly affect the budding cryptocurrency betting landscape, and eventually will dictate its fate in the online gambling world.

The efforts to regulate Bitcoin use could very well be the changes to affect the Bitcoin gambling industry. But as to what degree their impact on the market will be remains in the gray area. The recent developments with the implementation of New York’s BitLicense, as well as the Australian Senate Report, however, provide a preview.

Will BitLicense kill Bitcoin gambling?

It is unlikely that the infamous BitLicense regulations will stop the growth of Bitcoin gambling, but dismissing the possibilities of it influencing change is one thing the Bitcoin community must resist.

It can be recalled that Bitcoin experts and analysts had once said that BitLicense may serve as the basis of other states and countries on how to regulate Bitcoin and other digital currencies. Unfortunately, this New York regulation policy is against the promotion and support for innovations. Hence, several market leaders have already bid the Big Apple farewell.

Recent reports have already enumerated the Bitcoin companies that were forced to vacate their offices in order to continue operating legally. Bitcoin exchange BitFinex, payment processor GoCoin, and instant cryptocurrency exchange are some of the popular businesses on the Bitcoin network that chose to veer away from the BitLicense regulations, and therefore, avoid paying high licensing fees.

Bitstamp, however, applied for the license, according to CEO Nejc Kodrič’s tweet. This received criticisms, with some urging the Bitcoin exchange to follow the steps fellow exchanges Kraken and BitFinex made.

The exit of the prominent names on the Bitcoin scene from New York hints of the repercussions of the regulations. This, however, should not largely impede the growth of Bitcoin gambling.

Can the same be said about Bitcoin betting in Land Down Under?

Meanwhile, all eyes are on the progress of Bitcoin in Australia. Whereas the BitLicense sparked flak from cryptocurrency supporters, the Senate Economics References Committee Report on Digital Currencies resonated with optimism toward the development of Bitcoin and digital currencies in general.

News of efforts to free Bitcoin exchange transactions from the added tax imposed by the Goods and Services Tax (GST) impressed bitcoiners in and outside Australia. Likewise, the improved law will require Bitcoin-purchased goods and services to be taxed only once.

This would mean that the country is slowly treating Bitcoin as a real currency, which—if it pushes through—will serve as a monumental step for the cryptocurrency ecosystem.

However, this may cause conflicts with the future of Bitcoin gambling. With Bitcoin treated as fiat, this gambling industry will be subject to the existing regulation policies that govern the land in terms of online gambling.

The GST fix, however, may take place in a few years’ time, so today’s crypto markets will have to adhere to the system currently being followed.

Meanwhile, Isle of Man for Bitcoin proves to be promising as the island continues to develop a legal framework for the growth of the cryptocurrency market.