Is Gambling With Bitcoin Legal In The USA?

Discussion in 'General Bitcoin Gambling Discussion' started by Humble Servant, Mar 24, 2017.

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  1. Humble Servant

    Humble Servant Active Member Staff Member

    Today The Merkle published an article titled "Is Bitcoin Gambling Legal in the United States?". This is an interesting question given the complicated legal status of gambling in the U.S. While the US Federal government has not made gambling illegal, it does prohibit banks and credit card companies from facilitating gambling related transactions. Only a few short years ago sites like PokerStars and Full Tilt Poker were enormously popular in the US until new legislation was introduced that made it illegal to use the US banking system for gambling purposes. While a few offshore poker rooms like Americas Cardroom and BetOnline still accept real-money players from the US, most of the major poker rooms have now exited the US market as a result.

    This created an opportunity for bitcoin gambling operators like Nitrogen Sports, FortuneJack and SealsWithClubs because these sites did NOT use the traditional banking system so they were not contravening the new legislation. The drawback is that most bitcoin sports bettors and poker players in the USA use exchanges like Coinbase which require buyers to go through KYC and AML so their names may be linked to coins that were used for online gambling. This risk is minimal give that the U.S. government has never targeted individual gamblers and have instead favoured prosecuting financial institutions who facilitate online gambling.

    Even the operator of the first every bitcoin-only poker room, SealsWithClubs, managed to avoid doing any jail time when the site was shut-down by federal agents back in 2015 for operating illegally in the state of Nevada.

    Like most things related to online gambling in the United States, the law is not very clear and can vary depending on which state you live in. Right now there doesn't appear to be any reason to be overly paranoid about bitcoin gambling in the USA but it's always good to remain cautious. For example, never send newly purchased bitcoin from your exchange wallet directly to a gambling site. Always use a middleman wallet that covers your tracks and introduces plausible deniability.
     
    Last edited: Mar 24, 2017
    Humble Servant, Mar 24, 2017
    #1
  2. 4TheWin

    4TheWin Member

    Even though porn is illegal in many states, the arrival of the internet made those laws redundant. I think the same thing will happen with bitcoin. As more people discover crypto-currencies, law enforcement will realise that fighting online gambling is completely futile and they will move onto other things.
     
    4TheWin, Apr 12, 2017
    #2
  3. Wonka

    Wonka Member

    On a federal level online gambling is illegal in the United States although states like Nevada and New Jersey do license online poker sites like PokerStars and 888 to operate. These anti-gambling laws aren't really enforced though and U.S. citizens aren't prosecuted if they are found to have used Americas Cardroom or Bovada. US law enforcement instead focus on laws that make it illegal to use the U.S. banking system for gambling purposes. This is why your credit card gets declined when you to try to deposit at an offshore gambling site and the reason that you withdrawal checks sometimes come from some a shell company in Africa.

    Since online gambling is illegal on a federal level, it probably doesn't matter whether you are using a credit card or bitcoin to make a deposit, you are still breaking the law. But since individual players are NOT targeted or prosecuted, I think it's a risk most online gamblers in the U.S. are willing to take. The authorities in the U.S. will probably instead focus on getting exchanges and wallets like Coinbase and Xapo to stop processing payment to gambling sites. Providing you take the necessary precautions and use a middle-man wallet like blockchain.info then I don't think the authorities have enough manpower to track every single transaction by a US citizen to make sure it doesn't end up in the bitcoin wallet of an offshore gambling entity.
     
    Wonka, Jul 1, 2017
    #3
  4. EthHead

    EthHead Member

    my understanding is it's illegal to operate a bitcoin gambling sites from the u.s but cryptocurrency gambling isn't illegal, at least not on a federal level.
     
    EthHead, Sep 6, 2017
    #4
  5. Humble Servant

    Humble Servant Active Member Staff Member

    The US government doesn't prosecute US gamblers but I would still urge American gamblers to use caution by registering at cryptocurrency poker rooms with a disposable email address that can't be linked to you.
     
    Humble Servant, Feb 19, 2018
    #5
  6. Humble Servant

    Humble Servant Active Member Staff Member

    Humble Servant, Jun 1, 2018
    #6
  7. PokerGod

    PokerGod Member

    it will still be better to use offshore bookmakers that don't have to pay taxes in the united states. they will always be able to offer better odds than books that have their hq in america.
     
    PokerGod, Aug 21, 2018
    #7
  8. Humble Servant

    Humble Servant Active Member Staff Member

    If you open the live chat and talk to a representative, they will probably tell you that it is your responsibility to know whether crypto gambling is illegal or not where you live. If you are OK with it then most (but not all) are happy to accept your business. Some crypto gambling sites may do some KYC/AML when you request a large payout so be aware of that.
     
    Humble Servant, Feb 25, 2019
    #8
  9. SuckIt

    SuckIt Member

    Most U.S. based bitcoin exchanges like Coinbase, Gemini and Cash App will close your account if they think you are buying and selling bitcoin on their sites for sports betting or poker.
     
    SuckIt, May 28, 2019
    #9
  10. Toast

    Toast Member

    If it wasn't illegal to gamble with cryptocurrencies in the United States, then why would CloudBet block USA-based gamblers? It's a huge gambling market so CloudBet would not have left if it was legal.
     
    Toast, Jun 12, 2019
    #10

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