Is Online Bitcoin (Crypto) Gambling Legal?

In the US the legality of gambling frequently appears on blogs and forums across the Web. There is no surprise as to why because since federal laws were invoked to restrict online gambling in the US, many states have passed their own online gambling laws that conflict with federal laws. These conflicting laws have left us all with some grey areas when it comes to whether or not you are allowed to gamble online. One grey area that has proved challenging to get to the bottom of is whether or not online Bitcoin gambling is legal in the US.

As if the laws associated with gambling with fiat currencies were not confusing enough, Bitcoin and digital currencies, in general, have added plenty more controversy to subject.
During the course of this article, we will research step-by-step the legality of online gambling using Bitcoin as well as other cryptocurrencies. The main idea of this guide is to help those that want to gamble using Bitcoin, or play Bitcoin Slots in states where online gambling is currently illegal. For those in states such as New Jersey and Nevada, this guide is unlikely to affect your current online gambling status.

The Regulation of Bitcoin in the US

How Bitcoin is regulated in the US is a good place to begin. At the moment Congress is still largely hung up on the whether Bitcoin should be recognized as a legal currency. Therefore, at the time of this writing Bitcoin is still not considered as legal tender in the USA.

If Bitcoin is not legal tender, then how is it regulated in the USA? You will hear plenty of talk about how Bitcoin investors are taxed; however, if Bitcoin is not legal tender, then surely Uncle Sam has no right to implement taxes on Bitcoin and other cryptos. However, in the US Bitcoin is seen as a commodity. As a result, all digital coins still have to be validated by registering them on a countrywide database.

Accordingly, the government can tax commodities based on profits/gains made from cryptocurrency commodities. At the same time, Bitcoin is considered both legal and regulated due to these circumstances.

Legality of Online Gambling in the US

Just as a side note here so you do not get confused, this section is purely here to give you an idea of the laws in regards to online gambling in the US. It still does not answer the question as to whether or not Bitcoin gambling is legal or illegal, which we will get to that part in due course.

It is firstly important to understand the laws of online gambling, so you can then draw to an accurate conclusion at the end of this guide as to whether or not gambling online with Bitcoin is legal. You may remember in the opening paragraph that we mentioned the current state of online gambling laws in the USA and how confusing “State Laws versus Federal Laws” are right now.

Did you know? There are no federal laws that forbid online gambling!

This may come as a surprise, but after much research, we can confirm that the federal legislation has not issued any law that says you cannot gamble online. In fact, the laws that prevent people from gambling in the US are based upon financial restrictions.
Monetary transactions with online casinos using financial facilities within the US are forbidden. This how the US government has been able to stop US citizens from gambling online. Therefore, if you happen to have an overseas bank account, then it is perfectly legal to use your foreign currency to sign up to an online casino.

That being said, even if you do have an overseas bank account and you are able to gamble online with a foreign casino, you still need to abide by state laws. In states where certain forms of gambling are illegal, it does not matter if you are playing online or live, you could be prosecuted if caught.

  • Gambling must be legal in the state
  • You need to be over 21 in most states
  • Some states forbid certain games of chance
  • Some states forbid sports betting

Just to recap so you fully understand the laws that apply to online gambling in the US. There are no federal laws that state online gambling is illegal. Instead, the federal laws associated with online gambling restrict US citizens from using US-based financial facilities to fund online casino play.

Saying that, if you are able to fund an online casino using an overseas account, you must make sure that you are also following any state laws in respect to gambling in general.

States With Internal Laws That Prevent Online Gambling

Two states in particular in the US have state-level laws that forbid online gambling altogether. That means even if you do have an overseas financial facility to fund online gambling, you are breaking law by gambling online.

  • Alaska: nearly all forms of gambling are illegal here
  • Kentucky: online betting is totally forbidden

You find that in the majority of other states online gambling can be accessed if you have access to financial facilities overseas. Those online gambling sites will not be situated in the US for the most part and are instead foreign casinos, so make sure you check the casino well regulated and licensed. Also, you will need to find an online casino that will accept US players.

States in the US Where Online Gambling is Legal

Local gambling commissions have now been set up to regulate online gambling from within their state borders. That means you can even finance your online casino account using a financial facility from within the state.

  • Delaware: Since 2012 residents of this state have been able to bet online on several table games and sports betting opportunities
  • Nevada: Not long after Delaware legalised online gambling, Nevada followed suit. Poker, table games, slots, lotteries, sports betting and many other forms of gambling can be found when playing at online casinos situated in Nevada.
  • New Jersey: – Since 2013 New Jersey has allowed betting online including poker, table games, and slots. The state is said to soon legalize online sports betting.
  • Pennsylvania: – In 2017 the state passed laws and citizens can expect to see online casinos open in the near future once the casinos get past all the red tape.
    The online casinos in each of these states are operated from within the state borders. Each casino that operates in the state must follow strict local gambling laws in regards to the way player accounts are handled in regards to player account balances as well as player privacy, plus of course, the fairness of gaming results.

Is Online Gambling Using Bitcoin Legal in the USA?

Now that we have covered the federal and state laws as well as ways in which US citizens are able to gamble online without having to use US-based financial facilities, we can now assess the legality of gambling with Bitcoin. If you have not already guessed it from reading the above, then here it is. Gambling online in the USA is 100% legal!

Provided you are not in a state that outright bans online gambling or any form of gambling and that you are of legal age according to state laws, you can use your digital currencies to finance online gambling. Bitcoin is of sorts an online gambling hack for US players. There are no laws that state US citizens cannot use Bitcoin to gamble online.

Cryptocurrencies are not recognized as legal tender in the USA. Therefore, the hack here is the fact that you are not using a US financial facility ties to the US$ to fund online gambling. In actual fact, the bottom line here is that you are not using legal tender to gamble.

As long as you are using a cryptocurrency wallet to make payments to an offshore online gambling site to gamble using Bitcoin, you are acting within the boundaries of the law. This is much like using fiat currency to fund an offshore online casino using an overseas account. All you need to do is find an online casino that is not operating within the United States and accepts Bitcoin.

For the most part, gambling online using Bitcoin or any other cryptocurrency from within the United States is perfectly legal as long as you acting within the boundaries of state laws. Contrary to popular belief, there are no federal laws that forbid online gambling. Rather, the law that prevents betting online in the USA is la legislation that forbids US citizens to fund online gambling accounts using US financial instruments.

As Bitcoin is not considered legal tender in the US, federal legislation is bypassed by those that are able to fund offshore online casino accounts using Bitcoin or other digital currencies.

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