Cryptocurrencies have seen a meteoric rise in popularity over the past few years. Many countries around the world, including Italy, are embracing cryptocurrencies. However, opinions may differ when it comes to online gambling and the crypto space.
In Italy, cryptocurrencies are legal and fully regulated by the government. Online gambling is also legal, and there are many top-rated sites that are licensed by the ADM. However, crypto and online casinos have not yet been brought together.
Italian Crypto Gambling Hurdles
While Bitcoin is a safe and convenient payment method for many Italians, not having access to the same options when playing online can be frustrating. There appear to be 4 main reasons why the government has not yet made cryptocurrencies legal at online casinos. Let’s take a closer look.
Local Laws and Regulations
The current laws in the country forbid online casino operators from adding cryptocurrencies of any kind as payment options. The biggest factor contributing to this law is the Italian government's lack of trust in the complete safety of Bitcoin and other cryptocurrencies.
It is believed that the blockchain lacks security, which is a claim that may confuse many as crypto is seen as one of the safest currency options around. But it allows for complete anonymity, which is what the Italian government is fighting for.
Money laundering is a large focus for the ADM, and the decentralised nature of the blockchain means insufficient control or information is available. Casinos that run under the AAMS license are required to track all transactions, and this cannot be done when cryptocurrency is involved.
Finally, the tax laws surrounding cryptocurrency in Italy are high. For every transaction over €2000, a tax of 26% is applied. This means that casinos and those who use crypto will need to pay large amounts in tax for each transaction.
AML and KYC Compliance
All regulated operators who want to ensure that their players stay safe will abide by KYC and AML policies. These policies ensure that customers are correctly identified and that they can afford to play online casino games.
Due to the anonymous nature of cryptocurrencies, these policies are not easily upheld. It was one of the main reasons the Italian government banned crypto tokens at igaming sites.
Money laundering can very easily be accomplished at online casinos, even via standard fiat payment methods. It’s even easier through crypto, where every transaction can be anonymous and not easily tracked on the blockchain. The ADM insists that AML practices come first, and that means cryptocurrencies, such as Bitcoin, Ethereum, or Litecoin, can’t be welcomed.
Keeping KYC policies active is another challenge. While it’s not impossible to learn more about a player even if they use crypto, many don’t want to supply personal information when they are playing anonymously on the blockchain.
But KYC (or Know Your Customer) is important for many reasons. Casinos need to know that the player they’re welcoming is above the legal gambling age, hasn’t been excluded from online gambling before, and is legally allowed to gamble in the country.
One of the unknown costs behind using cryptocurrencies at an online casino (or any business) is its possible weight on networks and applications. Implementing crypto in its many forms and maintaining the network in order to keep players happy can be expensive.
More than just the expense of maintaining networks, implementing crypto is a specialised skill set that your standard tech worker may not have. This means that online casinos would be required to hire a trained individual or team to ensure that the technology behind offering cryptocurrencies works as it should.
Finally, extra security may be required as the Italian government wants to make sure that players, their funds, and their personal information is as safe as possible. This means that new systems would have to be designed, set in place, and maintained to keep the good reputation of Italian online casinos intact.
Risk and Volatility
Finally, the risky and volatile nature of cryptocurrency is the last straw for the Italian government. We all know that investing in any crypto can be a risk as the markets change each day, but this hasn’t stopped millions of people around the world from taking the leap.
Due to the volatility that comes with the crypto world, Italian online casinos stand to lose large sums of money if the market tips in the wrong direction. This is not a risk they’re currently willing to take.
However, there are many crypto casinos around the world that are able to plan and account for these changes without hefty losses. When Italian casinos finally open their doors to the crypto market, this is something they will need to consider.
Where to From Here?
While all of these factors may be a reality right now, the Italian government may look at changing many of the laws in place to make the igaming industry more welcoming to crypto. With many players calling for this to become a reality, it could happen sooner than originally expected.
For now, Italian punters are welcome to visit foreign casinos as this is legal in the region, as long as they are licensed by Curacao or the MGA. These Non AAMS casinos often welcome crypto transactions.