Gambling using Bitcoin, Ethereum, and other cryptocurrencies

March 10, 2025

The online gambling industry has experienced a significant transformation with the emergence of cryptocurrencies. Cryptocurrencies, such as Bitcoin and Ethereum, have become increasingly popular among online gamblers due to their unique characteristics, including anonymity, fast transaction speeds, and low fees. This has led to a rise in platforms that allow users to gamble using cryptocurrencies, often termed "crypto casinos".

Interestingly, there is a notable overlap between frequent cryptocurrency traders and those who experience gambling-related harm, suggesting an inherent connection between these two activities. This research article explores the phenomenon of gambling using cryptocurrencies, examining its advantages, disadvantages, legal and regulatory landscape, types of platforms and games available, potential risks and challenges, and future outlook.

Cryptocurrency gambling offers several advantages over traditional online gambling platforms that utilize fiat currencies. These advantages include:

Enhanced Privacy and Anonymity: Cryptocurrency transactions generally do not require users to disclose extensive personal or banking information, providing a higher level of privacy and anonymity compared to traditional payment methods. This is particularly appealing to players who value discretion or reside in jurisdictions with strict gambling regulations. Some platforms even allow no-KYC (Know Your Customer) sign-ups, further enhancing privacy. However, it's important to note that some platforms may require KYC checks to comply with anti-money laundering regulations or other legal requirements.
Faster Transactions: Blockchain technology enables near-instantaneous transactions, allowing for quick deposits and withdrawals. This eliminates the delays often associated with traditional payment methods, such as bank transfers, which can take several days or even weeks to process.
Lower Transaction Fees: Cryptocurrency transactions typically incur lower fees compared to traditional payment methods. This is because intermediaries, such as banks, are eliminated from the process, reducing processing costs.
Increased Security: Blockchain technology provides a high level of security for cryptocurrency transactions. All transactions are recorded on a public ledger, making them transparent and tamper-proof. This reduces the risk of fraud and ensures the integrity of gambling outcomes. Moreover, the decentralized nature of crypto casinos can offer greater protection against fraud compared to traditional online casinos, which rely on centralized servers that may be vulnerable to hacking or manipulation.
Global Accessibility: Cryptocurrencies can be used to gamble online from anywhere in the world, overcoming geographical restrictions and currency exchange issues. This allows players from different regions to access a wider range of gambling platforms and games.
Protection Against Inflation: Unlike fiat currencies, which can be subject to inflation, the number of Bitcoins that can ever be issued is limited to 21 million. This predictable volume growth makes Bitcoin less susceptible to inflation, potentially preserving the value of winnings over time.

Disadvantages of Cryptocurrency Gambling

Despite the numerous advantages, cryptocurrency gambling also presents certain disadvantages and challenges:

Volatility: Cryptocurrencies are known for their price volatility, which can fluctuate significantly in short periods. This can affect the value of winnings and funds held in cryptocurrencies, posing a financial risk for gamblers. For example, a player might deposit 1 Bitcoin when its value is £20,000, but if the price drops to £15,000 by the time they withdraw their winnings, their actual winnings in fiat currency will be significantly less.
Regulatory Uncertainty: The legal and regulatory landscape for cryptocurrency gambling is still evolving and varies across jurisdictions. This lack of clarity can create uncertainty for both players and operators, potentially leading to legal challenges or financial losses. In some cases, players may be unaware of the legality of crypto gambling in their jurisdiction, potentially facing penalties or losing their funds if the platform they are using is shut down.
Security Risks: While blockchain technology is generally secure, cryptocurrency gambling platforms can still be vulnerable to hacking and cyberattacks. This can result in the loss of funds or personal information for users. For example, in 2023, hackers stole $41 million from the popular online casino Stake, highlighting the security risks associated with crypto gambling platforms.
Lack of Consumer Protection: Cryptocurrency gambling platforms may offer limited consumer protection compared to traditional online casinos. This can leave players with little recourse in case of disputes or issues with the platform. For instance, if a platform refuses to pay out winnings or imposes arbitrary withdrawal limits and fees, players may have limited options for resolving the issue.
Technological Barriers: Using cryptocurrencies for gambling requires some technical knowledge, including wallet management and understanding blockchain technology. This can be a barrier for less tech-savvy individuals. Players need to understand how to acquire, store, and transfer cryptocurrencies securely, which can be a daunting task for those unfamiliar with the technology.
Withdrawal Issues: Some crypto gambling platforms may present challenges when it comes to withdrawing winnings. This can include delays in processing withdrawals, imposing high withdrawal fees, or even refusing to pay out winnings altogether.

Legal and Regulatory Landscape

The legal and regulatory landscape of cryptocurrency gambling is complex and varies significantly across jurisdictions. Some countries have embraced cryptocurrencies and online gambling, while others have imposed strict regulations or outright bans.

Jurisdictions with Ambiguous Regulations:

In many jurisdictions, cryptocurrency gambling operates in a legal grey area, with no specific laws or regulations in place. This lack of clarity can create uncertainty for both players and operators. For example, in the United States, gambling laws differ from state to state, and there are no clear regulations governing crypto gambling specifically. This means that players in some states may be able to access offshore crypto casinos, while those in other states may face restrictions or prohibitions.

Jurisdictions with Licensing Regimes:

Some countries, such as Malta and Curaçao, have established licensing regimes for crypto casinos, providing a degree of regulatory oversight. However, these licenses may not offer the same level of consumer protection as those issued by more established gambling regulators. This means that players should exercise caution when choosing a crypto casino, even if it holds a license from a recognized authority.

Jurisdictions with Explicit Bans:

Other countries, particularly those with strict gambling laws or religious prohibitions, have explicitly banned cryptocurrency gambling. For example, gambling is generally prohibited in Muslim-majority countries, and many Asian nations have strict regulations or bans on online gambling. In these jurisdictions, players who engage in crypto gambling may face severe penalties, including fines or imprisonment.

Challenges for Regulators:

Regulators face significant challenges in applying traditional gambling laws to decentralized crypto casinos. The borderless nature of cryptocurrencies and the anonymity they offer make it difficult for regulators to enforce laws and regulations. This highlights the need for new regulatory frameworks that specifically address the unique challenges posed by cryptocurrency gambling.

Types of Cryptocurrency Gambling Platforms and Games

There are various types of cryptocurrency gambling platforms available, offering a wide range of games and features. Some popular platforms include:

Jackbit: A contemporary platform with over 6,000 games, including slots, video poker, and live dealer games.
Wild.io: Supports anonymous play and offers over 3,900 games from top providers.
Vave: Features a vast selection of 11,033 games and supports anonymous play with various cryptocurrencies.
Crypto Games: Offers a limited but exclusive collection of in-house developed games.
ThunderPick: Caters to both casino enthusiasts and sports bettors, with over 5,060 games and anonymous play.
BC.Game: A well-established platform with a wide variety of games, including a sportsbook and original games.
Stake: A popular platform with a focus on sports betting and casino games.

These platforms offer a diverse range of games, including:

Slots: A popular choice among online gamblers, with a wide variety of themes and features.
Blackjack: A classic casino card game with various versions available.
Roulette: Another classic casino game with different betting options.
Poker: A popular card game with various formats, including Texas Hold'em and Omaha.
Live Dealer Games: Offer a more immersive experience with real human dealers.
Provably Fair Games: Utilize cryptographic algorithms to ensure fairness and transparency.

Potential Risks and Challenges

Cryptocurrency gambling presents several potential risks and challenges that users should be aware of:

Addiction: Cryptocurrency gambling can be addictive, particularly for individuals with pre-existing gambling problems. The accessibility, anonymity, and fast transaction speeds of crypto casinos can exacerbate addictive behaviours. This is further compounded by the challenges of implementing responsible gambling strategies in crypto casinos due to the anonymity and lack of player accounts, which can make it difficult to track player behaviour and provide support for those at risk.
Financial Losses: The volatility of cryptocurrencies can lead to significant financial losses for gamblers. Players may lose their funds due to price fluctuations or if the platform they are using is compromised.
Scams and Fraud: The lack of regulation in the cryptocurrency space can make it easier for scammers and fraudulent platforms to operate. Players should be cautious and thoroughly research platforms before depositing funds. This is particularly concerning given that the lack of regulation in crypto trading can make it more susceptible to scams compared to regulated gambling, where platforms are subject to stricter oversight and consumer protection measures.
Money Laundering: The anonymity of cryptocurrencies can make them attractive for money laundering activities. Regulators are concerned about the potential use of crypto casinos for illicit financial transactions.

Future Outlook

The future of cryptocurrency gambling is likely to be shaped by several factors, including:

Regulation: Increased regulation is expected as governments seek to address the challenges posed by cryptocurrency gambling. This may include licensing requirements, anti-money laundering measures, and consumer protection measures.
Technological Advancements: Ongoing technological advancements, such as the development of more stable and efficient cryptocurrencies, are likely to further enhance the appeal of crypto gambling. This includes the rise of altcoins, which offer alternatives to Bitcoin with potentially lower volatility and faster transaction speeds.
Mainstream Adoption: As cryptocurrencies become more widely accepted, cryptocurrency gambling is likely to gain further mainstream adoption. This may lead to increased competition and innovation in the industry.
Decentralized Finance (DeFi): The growing influence of DeFi is likely to impact the crypto gambling landscape. DeFi platforms offer decentralized financial services, potentially providing new avenues for crypto gambling and enhancing user control over their funds.

Cryptocurrency gambling has emerged as a significant trend in the online gambling industry, offering both advantages and disadvantages. While the anonymity, fast transactions, and low fees of cryptocurrencies are attractive to many players, the volatility, regulatory uncertainty, and potential risks should not be overlooked. The future of cryptocurrency gambling will depend on how these challenges are addressed and how the industry adapts to evolving regulations and technological advancements.