Update on the Legality of U.S. Casino Players Banking with Bitcoin
With the United States poised to make a hefty investment in Bitcoin under President Donald Trump’s direction, it’s clear that BTC might soon become a prominent means of exchange in the U.S. That is certainly piquing the interest of online casino gamblers who are very interested in using Bitcoin to fund their online gambling accounts. The question on everyone’s mind is: “Is it legal for U.S. gamblers to interact with iGaming operators, using Bitcoin to fund their accounts?”
The Bitcoin Issue
The Bitcoin casino gambling question raises questions. First and foremost, one must consider where U.S. online casino gamblers are plying their trade. There are two options.
First, country loyalists prefer using iGaming sites that are tethered to the U.S. Unfortunately, online casino gambling is only legal in seven (7) states: Connecticut, Delaware, Michigan, New Jersey, Pennsylvania, Rhode Island, and West Virginia. Yes, several other states might pass the needed legislation in 2025, but that is not certain. The reality is U.S. citizens have very limited access to iGamong sites licensed in the U.S.
The offshore iGaming option is often the choice for those who can’t get legal access to iGaming sites in America. Indeed, there are hundreds if not thousands of online casino sites in Europe that are willing to cater to U.S. casino players. It only requires that U.S. casino players be willing to accept extra risks because they aren’t legally protected from disputes in most jurisdictions.
It’s the offshore option that has introduced Bitcoin as a banking option. It’s fast and convenient, and it offers a high degree of anonymity. Those are a few of the benefits U.S. Bitcoin users get for taking risks.
Is Bitcoin a Legal Banking Option With U.S. iGaming Operators?
The short answer is no! The reality is that American companies have struggled to accept Bitcoin and other cryptocurrencies as a means of exchange. Why? The country has not legally embraced cryptos as of yet. If and when there is doubt, merchants and consumers will generally steer clear. Indeed, U.S. iGaming operators are not able to legally accept deposits made with cryptos like Bitcoin.
Is It Legal for U.S. Gamblers To Fund Offshore iGaming Accounts With BTC?
This is where things get complicated because of something called the “The Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006.” What is the UIGEA?
In the early days of online casino gambling and sports betting, such activities were illegal in America. The legality issue was of little concern to U.S. gamblers who wanted to use offshore gambling sites. They did not see the laws against such activities as deterrents.
Recognizing it was nearly impossible to track the online gambling activities of millions of Americans, the federal government made little effort to try to police such activities. Instead, they decided to attack the problem from another angle. That led to the passing of the UIGEA in 2006.
Note: There was a prior law passed in 1961 that federal regulators tried to use to prevent U.S. gamblers from using the wiring system. That was the “Federal Wire Act of 1961.” Regulators failed to enforce this law with online gamblers largely because the law never mentioned the Internet. Why would it? The Internet was still 20 years off into the future.
The Purpose of UIGEA
Enter the UIGEA. Instead of trying to criminalize online gambling, the UIGEA was created to interfere with gambling account funding. The UIGEA made it illegal to fund offshore gambling accounts via any kind of money transfer option that required the use of the federal money-wiring system.
These options included credit/debit card transactions, fed wires, bank-to-bank transfers, and payment processing merchants like Western Union. If iGaming merchants accept such transactions, they would be subject to huge fines from the U.S. government.
How does this impact the use of Bitcoin as a gambling account banking option for Americans? It doesn’t. That’s where things get complicated. There is no specific mention of cryptos in the UIGEA because the concept behind cryptos like Bitcoin didn’t become a reality until a few years later than UIGEA’s passing.
Therefore, it’s fair to state it’s not illegal for U.S. online gamblers to fund their offshore gambling accounts with Bitcoin or any other crypto. However, they will get no protection from the U.S. government if something goes awry. They can use Bitcoin if they are willing to accept the risks associated with doing so.
Are Bitcoin Casinos in America’s Future?
A Bitcoin casino is an online casino that accepts Bitcoin and other cryptos as viable banking options. That could be limited to deposits or withdrawals, or include the ability to play online casino games directly with cryptocurrency instead of chips.
Are Bitcoin casinos in America’s future? This is an interesting question. It gets more interesting by the day as more Americans embrace the idea of using Bitcoin as a means of exchange.
For now, the White House and the U.S. Treasury are trying to figure out how to regulate the crypto industry. Until they get it figured out, Americans on American soil and cryptos will live in a world of gray.
Should the federal government under President Trump get crypto laws and regulations in place, it’s reasonable to expect that Bitcoin casinos would eventually become a reality in the U.S.
Will U.S. iGaming operators really embrace the crypto concept? Yes, there is every reason to believe they would. Why? It’s a well-known fact that crypto users tend to have more liquidity than the average Joe. They also tend to be risk-takers. It’s a good bet that U.S. iGaming operators like Caesars, DraftKings, and FanDuel would willingly cater to high rollers who come to play with a coin or two.
Of course, this issue will gain steam should the U.S. iGaming market start expanding. It’s going to take time largely because of regulatory issues revolving around Indian Tribe control over casino gambling in 25+ states.
Here’s our prediction. iGaming will start expanding within two years. By then, the Trump admin will have crypto regulations in place. That’s the alignment that’s going to be necessary before Bitcoin casinos become a reality in the U.S.