In recent years, there’s been a major shift in how cryptocurrencies are viewed. They were once just something in the background that seemed to be the reserve of those who may have been classed as ‘geeks’. Today, however, crypto has hit the mainstream and is becoming increasingly common in more areas of our lives. One such area is that of online gambling.
While the laws around online gambling can be complex at times, the majority of people know whether it is legal in their country. Certainly, in Canada, this is 100% the case as long as you’re playing at a licensed site. However, when you throw crypto into the mix, does this make any difference? Can you legally use crypto in online casinos in Canada? Are the rules different elsewhere in the world? As you read on, that’s just what we’re going to cover.
Cryptocurrency and Online Gambling
When it comes to the legality of any crypto casino, there are a couple of factors to consider. The first point is the legality of crypto itself in your location and the second is the stance that is taken on online gambling generally. Perhaps a good example here can be seen by looking at China. This is a country where both crypto and online gambling are illegal. Then there’s the likes of Canada, the UK, and Europe where online casinos have been embraced, along with strict regulations.
With the legality of crypto casinos, in some countries this can be seen as a grey area. That’s because crypto itself is not always recognised as real money in some jurisdictions. This doesn’t make crypto a no-go. It simply means that there aren’t any specific laws that relate to it. The good news for those in Canada, is that this is a country that has embraced crypto, so this makes the likes of bitcoin casinos have the green light too.
Does the Use of Crypto Change the Legality of Online Gambling?
This question can only be fully answered by looking at your own country of residence. Let’s say you’re in a country where cryptos have legal backing but online casinos don’t, the likelihood is that wagering a crypto casino will be illegal. Likewise, if you’re in a country where online casinos are allowed but cryptos are banned, you could still be in murky waters.
In Canada, online casinos are perfectly legal so that means that the first hurdle is overcome. When it comes to the second, there are no issues here either. You just need to look at the attitude towards the likes of bitcoin and how Canadians have embraced it as an investment tool, and placed their trust in it.
A Look at Gambling Laws Around the World
We’re now going to take a closer look at how some of the major nations around the world view online gambling. Why does this matter? Well, if you’re a casino fan it’s always good to know where you stand if you ever find yourself overseas. Let’s take a look:
United States
The good news in the US is that crypto is entirely legal. In fact, some major companies, such as Tesla, Microsoft, and PayPal, are actively involved with this. Where the grey areas creep in here is when looking at gambling laws themselves. There’s a lack of conformity here, and you’ll find variations from state to state.
As it stands, online sports betting is currently legal in some 30 states. However, there is less acceptance when it comes to online casinos. There are some states that have an outright ban on these, while others allow them but under very tight conditions. This doesn’t mean that those in the US miss out. They simply turn to offshore casinos that are licensed in other countries.
While offshore casinos can be a solution, those in the US still need to be careful. In fact, there are some crypto casinos that explicitly ban US players as they don’t want to be drawn into complex legal arguments.
Canada
The good news for casino fans in Canada is that the legal framework is much clearer. As it stands, gambling laws are handled at provincial level, but it’s also worth noting that there are no laws in place that prevent players from accessing offshore operators.
When it comes to cryptocurrencies, these are 100% legal, and supported, in Canada. This means that Canadians can stay on the right side of the law when using bitcoin, and other cryptocurrencies, to gamble on international platforms. When it comes to local Canadian casinos, there may be provincial rules around gambling with crypto. These need to be checked but, if in doubt, opt for a reputable offshore operator.
While there are no laws to prevent Canadians playing at crypto casinos, the best advice is to stick to sites that have an outstanding reputation and that can be trusted.
United Kingdom
The UK is a great location for online gambling as it has one of the biggest markets in the world. The regulation is strict here, and is overseen by the UK Gambling Commission (UKGC). This body ensures that casinos adhere to a host of regulations that are all designed with player safety in mind.
Cryptocurrencies are perfectly legal in the UK. However, when it comes to crypto casinos, the UKGC insists that they comply with the same levels of security as traditional sites. That means that they must still apply anti-money laundering policies, as well KYC checks.
Australia
This is the country that has some of the strictest regulations when it comes to online gambling. There’s a thriving market when it comes to online sports betting but, on the whole, online casinos are pretty much prohibited.
The country has recently made moves to restrict the use of both credit cards and crypto for any form of online gambling. This move means that it’s now illegal to use crypto at an online casino. Any casino that lists it as a payment method would be breaking the law.
That being said, crypto offers a degree of anonymity and so enforcing these laws has proven difficult.
Are Crypto Winnings Subject to Tax?
Whether or not you need to pay tax on your crypto winnings will also depend on the country that you’re in. There are major differences to the rules depending on your location. Let’s take a look:
Canada
The good news for gamblers in Canada is that your winnings are not usually subject to any taxation. The exception here is if gambling is your primary source of income. There is something else to be aware of here though. As crypto is legal in Canada, it is treated like any other asset and that means that tax does apply when you sell it and profit from it. Capital gains tax kicks in and this must be declared on your tax return.
United States
If you’re gambling in the US, all winnings are subject to tax. That also applies to any crypto wins. As they’re classed as taxable income, they must be reported to the IRS. Winnings must be reported in the year that they were received, and you also need to include any capital gains that you’ve benefited from via the sale of crypto.
United Kingdom
The UK shines yet again when looking at online gambling. Why? Well, in this country your winnings are not subject to tax. However, just like in Canada, you may need to consider capital gains when it comes to profits made through buying and selling crypto. If the likes of Bitcoin is won and it increases in value from that time to the time it sold, capital gains tax would apply.
Australia
Things are quite similar here in that tax only really applies to gambling winnings if this is your main source of income. Again, gains made from the sale of crypto must be declared as these will be subject to capital gains tax.
So, Can I Legally Play at Crypto Casinos in Canada?
While we’ve looked at regulation around the world, the clear message here is that crypto casinos are 100% legal in Canada. While in some countries, it can be argued that there’s a grey area, there is nothing in any legislation that prohibits it here.
If crypto is your choice when it comes to gambling, you may need to factor in any impact when it comes to capital gains tax. Other than this, you can gamble as normal, but with all of the benefits that crypto offers.
Crypto casinos have taken off in recent years, but the reality is that these are still in their infancy. There’s no doubt that, as crypto itself continues to establish itself, that regulations will evolve. This is nothing to fear for fans of crypto casinos. In fact, it can only be seen as good news. It simply means that what is already a secure gaming environment will be made even safer as there will be no opportunities for rogue operators to have an impact.
So, you can go ahead and play at your favourite crypto casino knowing that this is perfectly legal in Canada. As with any casino, just be sure that the one you choose is reputable, licensed, and has a solid reputation. This advice means that, whether you’re using crypto or fiat currency, you can be sure of an exceptional experience in an environment that’s safe.
