Bitcoin has proven to be quite a powerful tool in the online gambling sector so far. Various casinos accept bitcoin payments already, although there is still a lot of room for future growth. One question that is on most people’s minds is whether or not bitcoin gambling is even legal in their region. This question is particularly valid in the United States, as things are not as black-and-white there by any means.
The Situation of Bitcoin Gambling In The US
While some users may not be too bothered about the legal status of bitcoin gambling in the United States, the topic is well worth looking into. Online gambling has been a topic of debate for the past few years, even in the US. Different states have different opinions and regulations in place to tackle online gambling. This explains why some online gambling platforms do not serve customers in specific states.
To be more specific, if the state or region you live in prohibits online gambling, it will not matter which form of payment is being used. Gambling is – technically speaking – not illegal on the federal level by any means. However, several US states have made gambling illegal, regardless of whether it occurs in a physical location or on the internet. The method of payment used to fund one’s gambling activities, however, is a different matter entirely.
Using the banking system for gambling purposes is prohibited in the United States. To be more specific, these laws apply to gambling operators on a state and federal level. Federal legislation focuses on the transfer of funds, whereas state laws regulate the operations within their respective state. Some people may recall how poker in the United States used to be a thriving business until a few years ago.
Ever since the regulatory change regarding the funding of gambling activities was introduced, poker sites started to decrease in number rather quickly. On the other hand, this creates an opportunity for alternative funding methods, including bitcoin and other cryptocurrencies. That does not mean using bitcoin will be without consequences, though, as obtaining and converting bitcoin often means going through an exchange who has your personal information on file.
It is worth nothing the IRS has not taken an official stance on bitcoin gambling yet. Even though it is possible for gamblers to make a profit, get paid out in bitcoin and convert their winnings to US Dollars, the IRS is not concerned about this scenario. In fact, there have been no notable events of either the IRS or the Department of Justice going after individual gamblers who deal with bitcoin. Gambling operators, on the other hand, may face the wrath of these organizations at any given time.
Speaking of bitcoin gambling operators, the infamous SealsWithClubs website has been officially shut down by Nevada state officials in 2015. Bryan Micon, who operated this platform, pleaded guilty for running an unlicensed online poker platform. He ended up paying a hefty fine, yet successfully avoided jail time by pleading guilty to this charge. In the end, bitcoin gambling remains a gray area for the time being. Individual gamblers should be safe from governmental scrutiny, but even that situation can change at any given time.
If you liked this article, follow us on Twitter @themerklenews and make sure to subscribe to our newsletter to receive the latest bitcoin, cryptocurrency, and technology news.