Impact of Cryptocurrency Regulations on Online Gambling Industry

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The concept of cryptocurrency and blockchain dominates the emerging financial technology space. These new digital revolutions are sweeping the world on both the economic and operational fronts. While the governments have adopted a contrasting viewpoint on cryptocurrency and blockchain, organizations across different sectors are embracing these technologies with open arms.

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 Crypto Adoption in Industry

The renowned organizations such as Google, Facebook, Yahoo, Amazon, and IBM are earmarking heavy investments for making progress in digital payments and blockchain technology. These companies are aware of the bright future in the digital space and working hard to achieve first-mover advantage on this front. Government and Federal institutions, on the other hand, are not very enthusiastic about the concept of digital coins. They feel that cryptocurrencies are a threat to their sovereignty and adopting digital coins will weaken their hold on governance and monetary policy.

However, cryptocurrency is also facing some threats owing to the increasing regulations all around the globe. Many industries heavily rely on crypto owing to their unregulated characteristics, but in the wake of intensifying regulations, these industries could suffer majorly. One such industry is online gambling, which has seen massive adoption of cryptocurrency, although now, with the threat of regulation looming large, online gambling could see its fortunes shifting away from crypto.

 

Online Gambling and Cryptocurrency:

Gambling continues to remain illegal in some countries, although many other states are inconclusive on the legal status of the industry. People who are interested in betting find it hard to fund their finances as most of the banks and financial institutions stay away, fearing the legal repercussions.

However, online casinos offering cryptocurrency payment facilities are better off as they offer a window of opportunity to all those who are interested in online gambling but finding it difficult to fund their bet. Using digital coins, one can easily bet without getting entangled in any legal jurisdictions and stay anonymous throughout the process. Not only the betting, but withdrawal of the prize money is also swift in case of digital coins as there are no third-party formalities. Another major benefit of using cryptocurrency for online gambling is a high-security factor. The player does not need to disclose his/her personal information, thus lowering the risks of online frauds or identity theft, among others.

 

Intensifying Regulations:

With cryptocurrency gaining acceptance from more and more people across the world, governments are coming forward to regulate the digital coins. One of the legitimate reasons behind crypto regulation is to control the misuse of the technology and check online frauds, which have rocked the crypto space from time to time.

With government oversight and more bureaucratic control, it is assumed that cryptocurrency can be made safer and more secure for the masses.

While the move is right in its spirit, the result of having more control and third-party authentication will subsequently defeat the very purpose of cryptocurrency for which it has been invented. The entry of the mediating partner will take a toll on the speed of the transactions, and the introduction of red tape would certainly slow down the overall process. The enhanced regulations also mean that a central authority will have access to the data, which, in turn, means the safety and security aspect of the cryptocurrency will be compromised.

All these important parameters, i.e., speed, anonymity, and high security, are principal reasons behind the popularity of cryptocurrency in the online gambling industry. And if regulations take away these aspects, there won’t be much motivation left for gamers who today participate in online gambling enthusiastically owing to these characteristics.

 

Crypto Regulations and Online Gambling:

It will be very difficult to implement cryptocurrency regulations without negatively impacting the online gambling industry. For making online gambling legitimate, one must have proper legislation in place, which essentially means cryptocurrency will also come under the ambit of a regulatory framework.

If that happens, the popularity of online casinos will take a hit. The very basic purpose of using cryptocurrency will be defeated as personal information, third-party vetting, and scrutiny of records will take place, leaving online casinos no better than their conventional, physical counterparts.

 

Striking a Balance:

Some experts argue that doing a balancing act here could lead to a solution where the concerns of both regulatory authorities and online gamblers can be met. It is not a simple process and requires a high level of diligence, sincerity, and a balanced viewpoint, among others.

Some aspects of the crypto payments can be regulated, but it should be done in a manner that the regulations and safety mechanisms do not obstruct the speed and efficiency of the crypto payments. The key here is to regulate only a part of the payment process rather than overseeing the whole process. However, it would be contentious to define the parameters on which the regulations will be implemented, and which part should not come under the regulatory purview.

 

Open Negotiations as Key:

To draw the underpinnings of such a mechanism and to reach the consensus on the parameters, all the stakeholders involved in the process must come together and exchange ideas with an open mind. Deliberations must be held, and the processes should be scrutinized based on their utility and relevance on the aspects of safety, security, and convenience. Even the participation from the public should become part of the process, and regulators must try to build a consensus that will prove to be a win-win situation for all the concerned stakeholders.

 

Summing It Up:

Unfortunately, we aren’t witnessing any such holistic effort that is inclined to take the middle part when it comes to regulating cryptocurrency and blockchain technology. Most of the governments are taking one or another extreme position, either by openly embracing crypto or completely ridiculing the concept as a threat to their sovereignty.

It seems that any effort to regulate cryptocurrency will draw a negative reaction from the online gambling industry as it depends heavily upon the deregulated nature of digital coins. The implications of any immediate crypto regulation will be severe for online casinos, and it would be difficult to strike a balance between cryptocurrency regulations and the fledgling online gambling industry.

 

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