Is Bitcoin Gambling Legal In The Us
- Is Bitcoin Gambling Legal In The Us Constitution
- Is Bitcoin Gambling Legal In The Us Currency
- Is Bitcoin Gambling Legal In The Us Today
If you haven’t heard about Bitcoin by now you’ve been living under a rock on a planet orbiting a distant star. You probably shouldn’t even be here reading this article.
Just kidding.
All jokes aside, Bitcoin has become the medium of choice for online gamblers because … well, honestly, it’s hard to say why Bitcoin is so popular with online gamblers.
Is It Illegal to Use Bitcoin for Gambling in the United States?
Aug 18, 2019 Bitcoin is legal in the US and has even been labeled as a commodity by the CFTC. That means the Bitcoin side of the casino equation in the US is not the root of the issue. The gambling side of the equation is the biggest issue. Bitcoin casinos are legal in the US wherever any other kind of casino is legal. Bitcoin is legal in the US and has even been labeled as a commodity by the CFTC. That means the Bitcoin side of the casino equation in the US is not the root of the issue. The gambling side of the equation is the biggest issue. Bitcoin casinos are legal in the US wherever any other kind of casino is legal.
That’s a tricky question, because gambling using any kind of currency from the U.S. is mired in multiple legal areas–state laws and federal laws. I can say with confidence that no federal law explicitly forbids Bitcoin gambling per se.
- Is Bitcoin and gambling with it legal? Technically speaking, one can argue that Bitcoin is legal, since no written laws are making it or making its ownership illegal. However, no laws are saying that it is legal, either. Thus, this puts Bitcoin and all of the other cryptocurrencies in a grey area of legality. Throughout the years, more and more.
- Gambling legality is a controversial issue in the United States because different states have different laws and regulatory policies. Gambling is legal in some states and prohibited in others. When talking about online gambling, the situation is less clear. When talking about bitcoin gambling legality, there is even less certainty.
- Dec 10, 2020 Again, in most states, the current legal framework provides few clear guidelines about using Bitcoin to gamble in online casinos—a number of which now accept Bitcoin. Thus, at those casinos that accept it, betting with Bitcoin is perfectly legal, and the same applies to lotteries, where tickets can be purchased with Bitcoin.
It’s illegal to take sports bets over the internet because of the Wire Act, for example. It’s illegal to transfer money or facilitate such transfers for the purposes of illegal gambling–because of the Unlawful Internet Gambling Enforcement Act (UIGEA). You could theoretically use Bitcoin for either purpose and run afoul of the law.
That doesn’t mean that Bitcoin gambling is illegal throughout the U.S., though.
Bitcoin is built on blockchain technology. What we as users need to know about blockchain is that it is the slowest database technology ever designed.
Seriously.
You can run an SQL query on this blog that completes in a fraction of a second. You can conduct a Bitcoin transaction that completes sometime in the next 12 hours.
Bitcoin solves some problems for people who need to move money around the world. If you wait for bank transfers to complete, you might be waiting for several days.
Compared to that, sure, Bitcoin transactions are fast.
And if you don’t have a bank account, you can create your own Bitcoin wallet and receive payment from anyone with their own Bitcoin wallet anywhere in the world. Cashing out of Bitcoin or any other cryptocurrency requires that someone, somewhere, have access to a banking system.
Bitcoin Is Not Exactly Legal Tender in the United States
This is a critical point for many people doing business in Bitcoin. Although one U.S. court has ruled that Bitcoin is money, the general perception among legal experts is that Bitcoin is not yet legal tender in the United States.
You cannot pay your taxes with Bitcoin, for example.
That doesn’t mean the government doesn’t want to tax your earnings in Bitcoin. Quite the contrary. They won’t allow you to pay your taxes in pork bellies, but they will demand a cut of your profits from trading in pork bellies.
By that measure, Bitcoin is more of an electronic commodity that can be traded on various exchanges.
And people buy and sell Bitcoin all day long.
Unfortunately, several proposals to create Exchange Traded Funds (ETFs) for Bitcoin have been rejected by the US’ Securities and Exchange Commission (the S.E.C.). ETFs are popular with stock investors because they follow market indexes and usually return stable profits even in bad economic times. ETFs also have the lowest fee structures because they are run by computers with minimal human supervision.
For now, Bitcoin owners can buy and sell their electronic wealth on the various exchanges or store it in wallets, but they cannot use Bitcoin as legal tender in the United States. If a business owner is willing to accept your Bitcoin as payment for goods and services, that’s their decision. They cannot deposit that Bitcoin into their bank accounts.
American Gambling Laws Are Written with Legal Tender In Mind
Our gambling laws were written years ago–before electronic alternatives to traditional money became popular. The “word of the law” never took the potential value of things like Bitcoin into consideration. This oversight makes it unlikely that any American citizen will ever be prosecuted for using Bitcoin to cover wagers at online casinos. In the eyes of the law, Bitcoin is not exactly legal tender, so it is more like “play money”.
But don’t convert your savings account into Bitcoin just yet. Other electronic commodities have brought down the hammer in a few court cases.
For example, buying loot boxes in video games has been deemed a form of gambling. The loot boxes contained random prizes and players never really knew what they were buying. Courts in both the United States and Europe have decided that video games should not be selling loot boxes to players.
Should cryptocurrencies like Bitcoin be treated the same as loot boxes?
Of course, gamblers would oppose such thinking because they want to keep playing.
For now, the main difference between using Bitcoin to gamble and buying loot boxes in video games is that you’re not buying the Bitcoin directly from the online casinos where you gamble. They expect you to deposit your Bitcoin into your casino accounts. Hence, you’re buying the Bitcoin elsewhere, and they have no interest in those transactions.
You don’t even have to pay for Bitcoin, technically. You could be given Bitcoin by anyone for any reason, including running your own Bitcoin mining server (although it’s very difficult to earn money by mining Bitcoin).
Online Gambling Laws Are Enforced against the Casinos, Not the Players
So far, few American gamblers have been arrested and charged with gambling online. If you decide to set up your own online casino, you won’t be able to legally operate one from an American web hosting company. You have to lease your software and resources from a company that can legally provide those services. You also need a license to run a gaming company.
You’re not going to get one in the United States.
A few states do authorize online gambling for their own resident citizens. To use an online casino in New Jersey, for example, you must be physically located inside the New Jersey state lines at the time you gamble online for money. Even if you create an account with a licensed online New Jersey casino and deposit money into that account, you cannot play for money while you are outside New Jersey.
So, while you’re not likely to be arrested for gambling online, you may find it hard to place your bets. If you live in the United States and you try to join a casino like Slots.Com or Bodog, you’ll be politely turned away. They don’t accept US players. By avoiding US players these online casinos don’t have to worry about enforcement actions in the United States.
So Who Are These Guys Running US-Friendly Online Casinos?
The online casinos that cater to U.S. players fall into 2 groups:
- The licensed gambling operations that build websites according to strict state licensing rules. If you live in a state that allows online gambling, you can find at least 1-2 online casinos that comply with your state laws. These sites are managed by reputable corporations that are held accountable to state laws.
- The second group of online casinos operates in a grey area. We sort of know who these people are, but the human owners keep their identities in the shadows. In other words, they set up corporations in foreign countries (and may not, for all we know, be U.S. citizens), and they operate according to the laws of those countries.
The Bitcoin-accepting casinos operate outside United States jurisdiction, and whether they can be shut down by American law enforcement depends on what they’re doing and how determined US authorities are to get to them. There have been a few cases where aggressive law enforcement actions have been taken against overseas companies.
For example, one group operating out of Costa Rica advised its gambling customers to buy debit cards from a popular online retailer and then to use those debit cards to make deposits. This was deemed “money laundering,” and things did not turn out well for everyone involved.
You May Hate Bitcoin, but We’re All Stuck with It
Bitcoin has had its problems. Several of the major exchanges have failed over the years, costing Bitcoin owners hundreds of millions of dollars in losses. And there is a theory circulating on the Internet that Bitcoin prices are, to a certain extent, being influenced by “whales” who supposedly own so much Bitcoin that they can drive the prices up and down.
The Bitcoin mining process has become so expensive that only a few companies still support it. Mining is the process by which new transactions are encoded into the publicly distributed blockchain. Until 50%+1 of the miners agree on the hashing values used to add new transactions to the blockchain, those Bitcoin transactions are not considered valid. As more Bitcoin blocks are added to the chain, it takes longer to add more blocks to the chain.
Several proposals to “fix” Bitcoin’s technology have either failed or led to the creation of new cryptocurrencies, sometimes generating competitive wealth for people who owned Bitcoin when the new blockchains were “forked” off to create the new cryptocurrencies. The politics of the Bitcoin mining community contributes to the cryptocurrency’s instability and price volatility.
Even so, because the online casinos that accept US players are trying to avoid explicitly breaking any US laws, they will probably continue to rely on Bitcoin as a medium of exchange. The value of your Bitcoin may rise and fall against mainstream currencies like the Dollar, Euro, and Yen, but until you trade out of Bitcoin you haven’t made or lost any money.
Of course, gambling with Bitcoin means you may lose some or all of your Bitcoin on the games you play. But you’re paying for entertainment when you gamble.
That’s the risk you agreed to accept when you signed up.
Conclusion
So, getting back to the original question: is it legal to gamble with Bitcoin in the United States?
Well, it’s not yet been determined to be illegal, so that is something.
As a player, you probably don’t have to worry about whether someone is coming to take you to jail.
But if you win money from gambling. you’re expected to report your winnings and pay taxes on them.
You could be prosecuted for tax evasion.
That’s an avoidable risk.
If you live in the United States, you must have heard about Las Vegas many times in your life, and you may have even paid “Sin City” a visit. But why did Vegas became so popular around the globe?
Purely due to the gambling activities going on – casinos. But with years passing by, many people have started going online to play on digital casinos using cryptocurrencies, and that had begun to make the government question the legality of online gambling.
If you add to it a new trend – cryptocurrency gambling, you might ask a question if it is legal to gamble with Bitcoin in the US? To our surprise, the answer isn’t obvious so be sure to read carefully.
The Situation of Online Gambling In The US
Everybody loves to be pumped with an adrenaline rush from time to time and gambling is the way to do so for a big percentage of people. But if you live in the US things may not be so easy or favourable for you.
No particular law prohibits players from the US not to be able to gamble online using bitcoin to play Poker, slots, Blackjack or any other game. At the same time, there is a possibility that the state you live in doesn’t approve online gambling at all, so betting using bitcoin as your chosen currency wouldn’t be entirely legal.
You have nothing to worry about, though, as the government and the different agencies dealing with gambling matters do not target players as much as owners of such online sites, to begin with.
That doesn’t mean in any case that any action you take online while gambling using bitcoin, or any other currency, will not get you in trouble. In the case, you are caught cheating or match-fixing you most likely will be heavily charged and may get sentenced to pay a big fine or even spend time in prison.
That is if you are the one of the executive/s carrying out the scam. If you happen to take part while something of that nature is going on you may be asked to testify, but chances are you will be left alone without any charges pressed as you are considered to be a victim rather than a partner in crime.
Which US States Accept Online Gambling
Gambling online using bitcoin isn’t prohibited itself by the US government, but some things are considered illegal in many states. To be considered illegal the act of gambling online using bitcoin can be determined by two things: whether online gambling is considered legal where you live, and if bitcoin is legal as a currency.
There are laws in some states that say it is illegal for someone to use the money to gamble online but they do not refer to the gamblers. They refer to the banking system, meaning whether the bank you choose to withdraw funds from and deposit online accepts to make the transaction. This is the illegal part, and the blame will go to the bank and not the player.
Here is where bitcoin comes in to save the day. Bitcoin is a decentralised digital currency (or cryptocurrency) meaning there is no particular bank behind it to authorise transactions or any other issues it may be related to. The biggest advantage of bitcoin is that you keep your anonymity while playing online and thus it is legal to gamble with bitcoin in the US or any other part of the world you live in, providing of course that bitcoin is considered legal there.
Now, that you know who the legal system targets more, it is about time to find out how the government tries to stop American citizens from gambling online. Rather than issuing laws to prevent the players the Department of Justice just doesn’t provide a license to online casinos that wish to operate from within the United States. It is a drastic measure taken by the majority of countries all around the globe.
So how do owners of such websites bypass the law? Mainly they decide to base their organisation in places not affected so much by such laws like Panama, Curacao, Malta, Costa Rica and the Philippines which are just a few of them.
On top of that, America’s Department of Justice has found another way to respond to that by making banks that authorise transactions to online casinos based anywhere in the world lose their license. But America doesn’t have a law stating transactions used to purchase or sell bitcoin is considered illegal thus giving online gamblers a loophole to operate within.
Which Online Casinos Accept Bitcoin In The US
Because of the previously discussed reasons, not all bitcoin casinos allow players living in the US. Although three of the best online bitcoin casinos that do indeed accept US players are:
Bitcoin Penguin
Bitcoin Penguin doesn’t accept only US players, but it is also an international online casino that takes only cryptocurrencies such as Bitcoin, Litecoin and Dogecoin. It features a vast selection of 600+ games meaning it is guaranteed that you will find something you like playing.
7bit casino
Another international online casino which accepts Bitcoin, Dollars and Euro as currencies. The bonuses it provides aren’t so special on its own, but what keeps the fame of the casino up is the 1000+ games available to players.
mBit casino
Apart from the 110% welcoming bonus, mBit casino is almost the same as 7bit casino when it comes to the selection of currencies to play with (as you can’t deposit Dollars) and the huge variety of 900+ games gamblers can freely choose from.
All three of them are certified as “provably fair” so it is entirely safe to bet on using bitcoin.
Where Can You Play Poker with Bitcoin in The US
Again, we will only mention three of the best online casinos you can play Poker with Bitcoin as your currency. These are:
mBit casino
Mbit casino takes place in both lists, and it is the sole one doing so. The main reason is that on top of the big game library it features a significant percentage of them are Poker related, both video Poker and table ones included.
Fortunejack Casino
This online casino is not only famous for the many slot games it provides but also for the fantastic Poker tournaments it holds every weekend which feature “high” prizes when it comes to winning money by participating in them.
Betcoin.ag Casino
This casino is one of the favourites and has a strong presence in the industry, mainly because it features its bespoke Poker playing software. Players can download it and play on both regular tables and tournament ones.
Once again all of them are certified to be “provably fair”.
So Is It Legal to Gamble with Bitcoin in The US
The answer to this question is for the most part yes. There will always be efforts by the government to stop any form of transactions that may lead money to get out of the nation’s reach and thus lower the amount of money available within the country. That isn’t necessarily bad as some other countries have become victims of actions like online gambling is.
What you have to remember is that online gambling and especially gambling online while using bitcoin isn’t illegal by itself, but there may be more general laws stating prohibitions of gambling or online gambling as a whole that may contradict with that.
Although another thing to know is it that every transaction carried out using bitcoin is recorded on a database commonly known as “blockchain”. Each person using bitcoin has a unique digital address, which is also linked with the person’s digital wallet (where bitcoins are stored). This doesn’t mean, though, that there is a total anonymity protecting the user as anyone using Blockchain can see the transactions carried out by a particular address.
Is Bitcoin Gambling Legal In The Us Constitution
At present, there is no law either in the US or anywhere else in the world that prohibits the purchase, sale or use of bitcoins but that doesn’t mean there may be other laws concerning gambling or online gaming, in general, that might contradict using bitcoin to gamble online. So as it follows it’s natural that using bitcoin isn’t welcome while residing in such countries.
Given all the previously discussed point, yes it is legal to gamble with bitcoin in the US. One only has to keep in mind all the different ways using bitcoin might contradict with the laws issued specifically in the state a person currently lives in. Purchases and sale of bitcoins can be carried out by multiple applications such as Coinbasewhich is the most popular choice for bitcoin lovers out there.
Is Bitcoin Gambling Legal In The Us Currency
So to sum up, as long as you are careful and don’t mess with the legal system by trying to cheat or tamper with it, you are ready to go and have nothing to be scared of. Just be sure to check that the online casino you play in is certified as “provably fair” and accepts players from the US, as many of them do not allow gamblers based in America.
Is Bitcoin Gambling Legal In The Us Today
Are you aware of any other online casinos that allow players with Bitcoin? Share with us in the comments below!