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Maybe the guy on the internet is wrong. Maybe they changed their mind since he asked. I spoke to them this week, they don't issue licenses "for Bitcoin" but they do think Bitcoin is covered by existing gambling laws. Feel free to email or call yourself. |
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If you run or are plan on running such a site - you need to lawyer up or start filling in the paperwork. I had a look at the fees, it is not cheap, it is not pretty. This is probably true in most places. However, there isn't just a bureaucratic issue, which would be bad enough. Often the "regulatory" bodies for gambling are utterly corrupt. It's not for nothing that one of the largest corruption scandals in recent memory involved Indian casinos, which basically involved extorting bribes from casinos to shut their competitors down, while playing both sides of the fence. I.e. "Christian" crook Ralph Reed would have his "Christian" group attack casinos, but not the ones who were paying the cartel. |
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In the US, a common formulation is "anything of value." So whether you're betting dollars, doughnuts, or tea-cakes, it comes under the law. The authorities aren't necessarily very consistent about enforcement, though. An example is a children's restaurant chain, Chuck E. Cheese's, which runs blatant games of chance offering prizes of value. There is no way this is legal, at least in jurisdictions that ban other games of chance run for profit, but you don't see the police knocking down their doors. This is pretty silly, considering that if the addictive potential of gambling is why it's banned, it's utterly absurd to let children gamble. It would be like banning cigarettes for adults, but then ignoring cigarettes marketed directly to children.
(Not that I think either is a good idea.)
They got Capone on Tax Evasion - when they can't arrest you for one law they will find something else. If they want to shutdown a Bitcoin site that hasn't broken any other laws, they will apply it selectively here even though they don't apply it to Chuck E Cheese. After all, Chuck E Cheese has lawyers, lobbyists and friends in government and we do not. |
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Bitcoin is not recognized as real money, right?
apparently it is considered a "virtual currency" In the UK, the government doesn't consider it money or currency however the laws regarding gambling do not revolve around the concept of money, they revolve around the concept of "Money's Worth". That means, anything with value - the UK Gambling Commission has confirmed they consider Bitcoin to be "Money's Worth" and therefor any UK based Sites, Developers or Business will need to be properly licensed. I assume there will be other countries taking a similar stance who don't care whether Bitcoin is money or not, they care if they can collect revenue through taxing gambling. I can only assume gambling laws here don't mention money specifically so that people aren't using tokens or cakes, etc in place of money to skirt laws. I can't imagine we are the only country who has done this. |
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This is good information, thank you for sharing it. Hopefully some sites will get a license and comply with the laws to avoid legal problems.
Alternatively host the gambling site offshore.  Careful - UK based developers may still need a developer license and operators may still need a personal/organisational license if they reside within the UK. If you ever try to cash out your share of your sites takings and the bank reports it upstream or if you were to record it faithfully on your tax return, if you were discovered to be operating without proper licensing even through an offshore website, you could still face the same fines and jail time. Rather than take legal advice from people on a forum - which let's be honest is why we ended up with so many sites before one of them even consulted the law, get a lawyer rather than thinking you or someone else with no legal experience whatsoever have found a loophole. |
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I see a lot of people here saying that Bitcoin Gambling sites in the UK do not need to be licensed because "Bitcoin is not money". The Gambling Commission takes a different view: Dear ButterflySammy,
Thank you for your email.
You mention that HMRC doesn’t recognise Bitcoin as currency, which is fine.
However, when it comes to gambling, the Gambling Act 2005 defines gambling as the ability to win prizes of money, or money’s worth.
While bitcoin can’t be classed as money, per se, it certainly counts as money’s worth.
The Gambling Commission receives a number of requests from people seeking advice or approval in setting up a business. We do not provide legal advice, including advice concerning the correct interpretation of legislation. Therefore, we cannot advise you regarding the viability or legality of a business idea. It is up to you to obtain your own business or legal advice.
Kind regards,
Licensing Officer
There you have it - Bitcoin is "Money's Worth" even if it isn't "Money" therefor any site operating in or from the UK still needs a license. If you are betting with or investing in a UK based site you need to be aware that they could be shutdown and take your money with them. If you run or are plan on running such a site - you need to lawyer up or start filling in the paperwork. I had a look at the fees, it is not cheap, it is not pretty. |
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In the case of the UK Government - the HMRC doesn't consider it money but are keeping a close eye on it and could change their stance. The UK Gambling Commission on the other hand consider Bitcoin to be "Money's Worth" and therefor UK Bitcoin Gambling sites almost certainly DO need a license. I think this runs contrary to most things I have read in the Gambling subforum here. Dear Mr ButterflySammy,
Thank you for your email.
You mention that HMRC doesn’t recognise Bitcoin as currency, which is fine.
However, when it comes to gambling, the Gambling Act 2005 defines gambling as the ability to win prizes of money, or money’s worth.
While bitcoin can’t be classed as money, per se, it certainly counts as money’s worth.
The Gambling Commission receives a number of requests from people seeking advice or approval in setting up a business. We do not provide legal advice, **including advice concerning the correct interpretation of legislation**. Therefore, we cannot advise you regarding the viability or legality of a business idea. It is up to you to obtain your own business or legal advice.
Kind regards,
Licensing Officer |
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