State-by-state, the United States of America is taking steps to legalize gambling. It’s natural to assume that eventually in the not-too-distant future, every state in America will allow you to gamble if you wish to. That doesn’t mean that it will be easy to gamble with Bitcoin. At least not through a casino operator based in the United States. Here’s everything you need to know about Bitcoin gambling in America.
Bitcoin Gambling Isn’t Legal in the United States
Although it is possible for Bitcoin gambling enthusiasts living in America to find a casino operator who will let you build a bankroll with them, that doesn’t mean Bitcoin gambling is legal in the United States. Like many other governments around the world, the issue of how to regulate cryptocurrencies and their use is an ongoing one. Gambling rules in America have been stringent for decades and it’s only in the last two or three years that the idea of state-by-state legislation and the country has picked up steam.
This means Bitcoin gambling sites are not allowed to be incorporated or set up offices in the United States. That’s why if you look at the terms and conditions on any given website, you’ll notice the headquarters are usually located on a remote island with more favorable gambling and tax regulations for gambling operators. For now, legal Bitcoin gambling in America is still a pipedream.
Hopefully the United States wakes up to the opportunity soon. In 2012 the number of gambling related transactions that took place on Bitcoin’s blockchain increased by 500%. With the current price continuing to increase throughout 2020, gambling will only grow as a use case for cryptocurrency as the years go by.
Crypto Regulation Is Evolving in the United States
Seven years ago, the United States did agree that crypto exchanges are valid money transmitters. Cryptocurrencies are now viewed as substitutes for regular fiat currency according to the law. The IRS views cryptocurrencies as properties and charges tax on these transactions which kind of takes some of the burden off of cryptocurrency exchanges when it comes to regulation. So on the one hand on the federal level, the government validates cryptocurrencies as valid for exchange, and on the other hand the IRS considers it property.
In 2018, the Securities Exchange Commission officially allowed for cryptocurrency derivatives to be publicly traded on the stock market. This now means investors can put money into cryptocurrency legally without having to own the actual coins themselves. This doesn’t do anything for gambling directly but it does increase the likelihood that the cryptocurrency market matures and stabilizes and that the world continues to see it as a valid store of value, which should eventually increase interest within the gambling industry and among American regulatory bodies.
The State of Bitcoin Gambling in the United States in 2020
The Financial Action Task Force represents a group of over 200 countries dedicated towards curbing anti-money laundering and terrorist financing with a robust plan to track transactions and regulate financial markets all across the world. FATF’s Travel Rule requires virtual asset service providers to collect information on beneficiaries and originators engaging in transactions worth $1,000 USD or more. This means that any business that facilitates cryptocurrency transactions is going to have to be meticulous about collecting information in the very near future.
This barrier is sort of a double-edged sword for Bitcoin gambling in the United States. On one hand, the stipulations outlined by the Travel Rule might deter most businesses from even entering the gambling space. On the other hand, businesses that are serious will come up with ways to deal with the rules and comply. In the long run that’s a good thing because it will further legitimize the idea of using cryptocurrencies to gamble in America.
All in all, the legalities of gambling with Bitcoin in the United States mimic what other countries are doing to regulate cryptocurrency in general. The idea of a gambling operator based in the United States accepting Bitcoin is probably still a few years away. For now, you will likely have to settle for using your cryptocurrency to wager on a website based offshore. That’s probably not a new idea to you. But if the price of Bitcoin keeps going up and up over the years, regulators will have no choice but to cash in on the frenzy and start legalizing Bitcoin gambling.