In the U.K., there has long been an argument about VIP gamblers and the introduction of affordability checks and bet limits. The U.K. government is currently undertaking a review of the Gambling Act 2005, which is predicted to include stricter measures on advertising, responsible gambling and affordability checks. There is a definite trend in regulated gambling markets for license holders being required to obtainmore information fromcustomers as part of KnowYour Customer (KYC) and Anti-Money Laundering (AML) checks. Some customers resent this intrusion. Crypto-gambling sites, which inmany cases are not licensed in these regulated markets, can be seen as a less intrusive option. In general, there are fewer limits and checks on crypto-gambling sites, although several sites do still havemaximumbet limits (varying by coin) and maximum profit limits for some games. Linked to fewer bet limits, crypto-gambling is better able to accommodate higher-spending VIPs – indeed, some sites are invitation only – without restricting bet amounts if a player has some winning bets. The threshold to even be classed as a VIP is very high in crypto-gambling – losses equivalent to $1.5 million might not even be enough. VIPs also appreciate the privacy given by crypto-gambling. Crypto-gambling’s current regulatory freedom comes from the fact that many operators do not appear to hold any kind of gambling license. Most of the crypto-gambling websites GBGC assessed did not make it clear on their website where, or if, they held a gambling license. Curacao was the most common jurisdiction for those operators which stated they held a gambling license. Choosing to operate without a gambling license saves the companies money because of lower regulatory and compliance costs. ‘PROVABLY FAIR’ There could be the perception that because crypto-gambling is “provably fair” and more transparent with verifiable transactions, there is no need for a gambling license. “Provably fair” is the mantra of the Crypto Gambling Foundation. It aims to bring greater transparency to online gambling and the process of random number generation: • “Formerly, these random numbers were generated solely by the host of a game, leaving complete control in the hands of operators. Participants had to trust the host not generating results in favor of anyone. Casinos operating on these merits caused conflict of interest for those seeking a fair gambling experience.” • “Proving that the outcome of a wager is computed fairly and transparently should be performed by anyone at any time. We strongly believe in widespread use of provably fair algorithms throughout the gaming industry.” Using cryptocurrency is certainly gambling with “money or monies worth,” somost jurisdictions would class it as gambling and expect an operator to hold a license, and comply with associated regulations like KYC, AML and social responsibility. The claim might be that crypto-gambling is “provably fair,” but things can still go wrong and, when they do, affiliates and customers need to know who they can turn to for help. In October 2020, the crypto-gambling site Ethercrash reported that $2.5million in digital currency had been stolen from its wallets. Allegations on social media claimed it was an “inside job” because the funds were taken from a “cold wallet,” one that was supposedly not connected to the internet. THE CRYPTO GAMBLING REVOLUTION G P W A t i m e s . o r g 30
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