Like it or not, it seems that controversial crypto gambling sites–much like prediction markets–are becoming the future of iGaming.
According to latest top-level data, crypto casinos and other betting domains that take-and-pay using digital currency have now surged past traditional online gambling platforms by harvesting more than US$80 billion in GGR last year – some US$81.4bn (£60.83bn) to be precise, a five-fold increase in only two-years.
The stats have been supplied by forensic financial investigators Yield Sec, whose founder Ismail Vali told paper-of-record the Financial Times (FT): “It’s explosive growth everywhere.”
With the exception of iGaming and tax-free enclaves such as Malta, Curaçao, the Isle-of-Man and Gibraltar, crypto gambling sites are banned pretty much everywhere.
Critics claim they are unregulated, and as such vault much-needed controls that protect vulnerable and under-age gamblers.
Spirit of Gambling
But proponents counter by saying that win or lose, crypto, exciting and often volatile, embodies the very essence of free market trading and the spirit of gambling.
While crypto gambling sites are blocked around the world, they nevertheless remain easily accessible via easy-to-use Virtual Private Networks (VPNs) that allow users to circumvent geoblocking and browse and access the Internet without constraints.
Crypto casinos now rival the regulated iCasino offerings of traditional gambling operators.
Among the new breed of crypto gambling heavy-hitters is Stake.com, known to many sports fans as principal shirt sponsors of, among other teams, the EPL’s Everton F.C.
According to well-attested metrics, Stake–incorporated under the Medium Rare banner in the Dutch colony of Curaçao in the southern Antilles–has had 25 million users, placing 300 billion bets, since it launched in 2017.
Money Laundering
Last year Stake had a GGR of US$4.7 billion (£3.51bn), 80 percent more than 2022, totalling some four percent of world bitcoin trading.
On these metrics, Stake, often featured in these pages, is patently up there with Flutter, entain, bet365 and other iGaming capos.
Yet Stake adamantly asserts that it is not a “crypto casino”.
More than 50 percent of financial payments on the Stake platform are in traditional currencies, the company told the FT.
“[Operations] are conducted in full compliance with applicable laws and regulations are legitimate and are fully licensed.
“[We have] stringent know-your-customer procedures and anti-money-laundering processes.
“[Users attempting to] gain unauthorised access by bypassing geoblocking via VPN will not be able to use the platform.”
Influencers
Yet real-world testing tells a different story.
iGamingFuture was able to access a number of popular crypto sites including Stake.com, CoinCasino, Lucky Block and BC.Game. Although all had varying levels of geolocation checks, minor location tweaks eventually allowed full access by the simple expedient of using a VPN.
In a recent report, entitled “Black Market”, by safer gambling activists Deal Me Out, CEO Jordan Lea, wrote: “We are seeing a significant rise in crypto casinos, fake games, and VIP schemes promoted by influencers who bypass UK regulations.
“The consequences of well-intentioned regulation must be considered carefully, or we risk pushing vulnerable consumers straight into the arms of the Black Market.
“We need to ensure regulators, policy makers, industry and all other stakeholders work collaboratively to prevent any further growth of illegal gambling.”
Lea was referring to a raft of new UK gambling regulations aimed at enhancing consumer protection, which include affordability checks, slot stake limits, changes to game design, and new rules for bonuses.
Illegal Gambling
Many operators–and now even gambling charities–say that these new rules are only causing consumers to migrate to illegal platforms, like crypto casinos, at “alarming rates” — in order to evade restrictions on gameplay and spending.
Contacted by iGamingFuture, the UK regulatory Gambling Commission said: “We take the issue of illegal gambling incredibly seriously.
“We do, and will continue to, take action to disrupt the unlicensed market; working with technology platforms such as search engines, other enforcement agencies such as HMRC and key facilitators such as payment providers and advertisers.
“Since April last year, our Enforcement Team has issued over 1,150 cease-and-desist, and disruption notices.
“Over that same period the commission has referred over 118,000 URLs to Google and Bing. Over 81,000 have been removed by the search engines.
“This is more than a tenfold increase in URL takedowns in comparison to the previous year.”
Spice
Nevertheless–and despite the added risk, some might say “spice”, of the double gamble, because of the inherent volatility of crypto currencies–it seems that crypto gambling is here to stay.
Super-charged by the sexy input of influencers and celebrities, enjoying laxer know-your-customer checks, crypto sites excite a strong lure for younger gamblers, the very future of the iGaming market.
Prominent anti-gambling campaigner Matt Zarb-Cousin, a co-founder of Gamban, director of Clean Up Gambling, and a senior government affairs advisor to Yield Sec, calls crypto gambling regulation a “wild west”.
Perhaps, paradoxically, he has hit on the essence of its very attraction.
Crypto gambling is just that: An exciting shoot-out at the fantasy factory.
