Here’s an insight into the potential dangers of making bets with crypto.
The online gambling industry has seen a massive surge in 2021, with the global market reaching a value of US$57.54 billion. This growth has been heavily driven by the mainstreaming of blockchain technology, with many gamblers opting to make bets using cryptocurrency. Faster transactions and extra security measures make cryptocurrencies an attractive option for those who want to remain anonymous while gambling.
This has resulted in a number of crypto casinos popping up, with the U.S. alone boasting 70 such establishments that have seen deposits of US$2.8 billion. Although crypto gambling is becoming increasingly popular, there are many risks involved that make it a risky venture. Here is a look at the possible hazards of crypto gambling.
Inadequate regulation
Regulating the use of cryptocurrency is still in its early stages, with some countries like the EU and India exploring this option. However, in many other countries, such as China, Indonesia, Russia and Turkey, cryptocurrency remains illegal. In the U.S., while cryptocurrency itself is not illegal, crypto gambling is forbidden. This means that in many countries, there is no framework in place to protect players and create regulatory policies for crypto casinos. As a result, it would be difficult to take any action against scams or fraud, as players would have no government body to report the matter to.
When it comes to crypto casinos that do have a gambling license, these are often issued by jurisdictions with minimal regulatory requirements and consumer protection. As per Casino Guru, many crypto casinos possess a license from Curaçao, a Caribbean former Dutch colony, which is regarded as having weak regulatory standards. This can leave people vulnerable to operators who take advantage of the lax laws to carry out unethical activities.
Price volatility
Cryptocurrency is known for its high price volatility. The value of a cryptocurrency can change drastically in a short amount of time, making it a very risky investment. For example, Bitcoin was worth US$46,224.39 on December 31, 2021, but it was trading at US$17,176 on December 11, 2022.
When playing at crypto casinos, this fluctuation can either give you an advantage or put you at a disadvantage. If you win a bet and the price of your crypto goes up, you could win more than you expected. But if the value of the crypto rises after you lose a bet, you will end up losing more than you intended.
Anonymity
The anonymity of crypto casinos can be a double-edged sword. On the one hand, it can be beneficial for those who don’t want to share their personal information when making payments. On the other, it makes it easier for the casino to scam you out of money, as there is no way to track the transaction and verify its legitimacy. In such cases, it would be difficult to hold the casino accountable and find out where your money went.
The lack of verification also means it is impossible to check the age of the gambler, allowing minors to access these crypto casino websites. This could have serious repercussions, such as financial ruin and addiction, for young people who may not be equipped to make the right decisions about gambling.
Promotes addiction
The lack of regulation and oversight in the crypto casino industry could also be a contributing factor to addiction for some individuals. This was demonstrated by the case of UK-based Twitch streamer “ItsSliker” who admitted to scamming his peers and the Twitch community to pay off his crypto-gambling debts in September 2022.
An anonymous gambling addict who spoke to NBC News also said that gambling in crypto casinos may be even more dangerous than in traditional online gambling sites. This is because crypto casinos lack the safeguards and anti-addiction measures that are in place to help their customers. People who struggle with compulsive gambling may bet in an attempt to recoup their losses, leading to an addiction.
Is there a safe way to gamble at crypto casinos?
The lack of regulation and anonymity of crypto casinos can make them a risky choice for gamblers. However, this doesn’t mean that there are no safe options available. The first step is to research the website you are playing on. You can look up reviews on Google or search for it on Reddit communities such as r/Bitcoingambling to get reliable information.
The website’s layout and design can also tell you a lot about its legitimacy. If it looks like it was put together in a rush, it is likely a scam. Additionally, be wary of websites that offer you big bonuses or rewards, as these may be too good to be true.
When playing at a crypto casino, it is important to be vigilant about where you are holding your cryptocurrency. It is best to keep the crypto on your computer or in cold storage, rather than on a crypto exchange wallet. Additionally, always check the terms and conditions before depositing any money in the casino, paying particular attention to details on licensing and third-party auditing (or the lack thereof).
Lastly, look out for casinos that have responsible gambling measures in place. These can include deposit limits, time limits and self-exclusion options. They are designed to help you practice responsible gambling and prevent you from developing a gambling addiction.
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