Decentralized Gambling: Promote Freedom or Promote Fraud?

[serjent05]

I wonder whether Decentralized gambling is actually promoting freedom or letting decentralized casino owners and users commit fraud and money laundering, since most are unlicensed and do not follow regulations.

According to this article: The Main Advantages of Decentralized Casinos, decentralized casinos offers freedom to their users by removing intermediaries and allowing them to gamble directly from their wallet.  It also gives an instant payout since the winnings are directly deposited into the user.  It stated that:

What makes decentralized gambling different:

Casinos operate 24/7, without manual processes.
Players trust the system because they see the rules.
Cryptocurrencies cut down payment lag and cost.
Volatility can be controlled with hybrid tokens.

On the other hand, I also read that decentralized gambling can be a tool for fraud and money laundering. Since transfers are often unregulated due to instant and automatic payout, it is said that this is prone to fraud and money laundering due to:

anonymous participation via wallet-based access,
No traditional KYC checks
Cross-border transfers without institutional intermediaries

Funds can't be easily traced since decentralized gambling allows users to play by just connecting the wallet it is also said that this creates a high-risk profile from a financial crime perspective. In addition, the article also stated that:

Without regulatory oversight, users have limited legal recourse in cases of fraud, smart contract failure, or asset loss. Legal systems may treat such platforms as unregulated financial services, increasing risk of intervention.

So what's your take on decentralized gambling?  Do you think it really promotes freedom, or is it just another option to commit fraud and money laundering in the guise of promoting freedom?

[m2017]

I wonder whether Decentralized gambling is actually promoting freedom or letting decentralized casino owners and users commit fraud and money laundering, since most are unlicensed and do not follow regulations.

If we evaluate a decentralized casino, then in theory, this casino should be "more honest" in relation to the user, because there will be no blocking of accounts for far-fetched reasons, such as passing identification (KYC). Also, the casino will not be able to appropriate the user's deposit if the decentralized casino is created correctly. We will talk about this below.

How can you "launder" money in a decentralized casino if the casino does not have a license, which means that government agencies will not accept the declaration of prize money won in such a casino?

Regarding fraud on the part of the user, it is also not entirely clear. In this case, the casino can appropriate the money (more on this below), but how can the user deceive the casino in this context, because the decentralized casino works in automatic mode. If there are no bugs (which is rare), then it will not be possible to deceive the casino.

According to this article: The Main Advantages of Decentralized Casinos, decentralized casinos offers freedom to their users by removing intermediaries and allowing them to gamble directly from their wallet.  It also gives an instant payout since the winnings are directly deposited into the user.  It stated that:

Here's what I'd like to point out. So, in order to play in a decentralized casino, need to provide access to your wallet? It seems to me that this is a weak point in this whole scheme and therefore, I don't recommend using the main wallet for gambling. It would be reasonable to use a special separate wallet, with the amount that is allocated for gambling.

On the other hand, I also read that decentralized gambling can be a tool for fraud and money laundering. Since transfers are often unregulated due to instant and automatic payout, it is said that this is prone to fraud and money laundering due to:

anonymous participation via wallet-based access,
No traditional KYC checks
Cross-border transfers without institutional intermediaries

It's funny to see this. The main advantages of the blockchain \ cryptocurrencies are listed here. Of course, the regulator will "demonize" these advantages due to the impossibility of controlling all this.

So what's your take on decentralized gambling?  Do you think it really promotes freedom, or is it just another option to commit fraud and money laundering in the guise of promoting freedom?

To be sure that decentralized casinos are a way of fraud, it is necessary to catch these casinos in such a criminal act. Are there cases of gamblers being deceived and robbed by decentralized casinos?

Regarding money laundering in such casinos, these statements also sound like "horror stories" in order to scare gamblers from using such casinos, therefore, not allowing them to engage in unregulated gambling. Here, as always, like any regulator "worries" about the taxes that it will not receive from a decentralized casino.

[Wiwo]

Yes decentralization means freedom, so both good and bad actor's adopt to it based on individuals preferences and choices of use, definitely money launderers, scammers  and hackers will abuse and exploit anything decentralized and for privacy reasons they all target that aspect of exploiting decentralized casinos, and not only decentralized gambling other services within the cryptocurrency space have been victims of bad actors exploitation such as Bitcoin privacy services like mixers and decentralized cryptocurrency exchanges.

[bitbollo]

Unless there is an entire protocol created ad hoc for gambling, I didn't see any real "decentralized" gambling platform.
I don't think that a platform like this could ever fraud someone (excluding hacks and rugg pull )
in the past there was WAGERR or similar experiments with crypto, but the real concept of decentralization it's not easy in real life (probably I would say impossible).

[BitGoba]

I wonder whether Decentralized gambling is actually promoting freedom or letting decentralized casino owners and users commit fraud and money laundering, since most are unlicensed and do not follow regulations.

According to this article: The Main Advantages of Decentralized Casinos, decentralized casinos offers freedom to their users by removing intermediaries and allowing them to gamble directly from their wallet.  It also gives an instant payout since the winnings are directly deposited into the user.  It stated that:

What makes decentralized gambling different:

Casinos operate 24/7, without manual processes.
Players trust the system because they see the rules.
Cryptocurrencies cut down payment lag and cost.
Volatility can be controlled with hybrid tokens.

On the other hand, I also read that decentralized gambling can be a tool for fraud and money laundering. Since transfers are often unregulated due to instant and automatic payout, it is said that this is prone to fraud and money laundering due to:

anonymous participation via wallet-based access,
No traditional KYC checks
Cross-border transfers without institutional intermediaries

Funds can't be easily traced since decentralized gambling allows users to play by just connecting the wallet it is also said that this creates a high-risk profile from a financial crime perspective. In addition, the article also stated that:

Without regulatory oversight, users have limited legal recourse in cases of fraud, smart contract failure, or asset loss. Legal systems may treat such platforms as unregulated financial services, increasing risk of intervention.

So what's your take on decentralized gambling?  Do you think it really promotes freedom, or is it just another option to commit fraud and money laundering in the guise of promoting freedom?

In practice, truly decentralized gambling barely exists. Most platforms that claim to be decentralized are actually centralized because they are controlled by companies or entities that manage key aspects  from software development to oversight and payouts.

Because of this, it’s hard to talk about genuine decentralization in this sector. Without real decentralization, these platforms can’t truly offer freedom to users and remain susceptible to regulatory issues, fraud, and abuse  much like traditional casinos.

[Crypt0Gore]

Haters are going to hate but I will keep spreading what I know to be true, any form of privacy or decentralisation is a weapon, even if we all come together to use it right remember that there are millions of people out there in the world.

We can't figure their mind out, some people are not into crimes yet because they are smart enough to know they will be caught, but if something was built to perfection for hiding wouldn't such people unleashed their menace already?

Bitcoin stands different because it's blockchain, open source and limited to what people can use it for, nothing other than make payment, avoid centralisation control of your fund. The creator needed to vanish for it to even work, if bitcoin has the capability for anonymous texting and moving of funds with no trace it will be a problem.

Gambling platforms that meant well for the people still have to succumb to the authorities because someone need to watch them anyway, you meant well for people doesn't make you a good person, we don't know what you do in your back doors.

[Justbillywitt]

One thing you have to realise is that something that's developed for a good purpose can be used for the purpose it wasn't intended for by some criminal elements who are out there to cause problem in the society. That being said, I strongly believe that decentralised casinos were developed to give it's users total freedom. They weren't developed for fraudulent activities.

[stadus]

Promote freedom (intentional) and promote fraud (unintentional)… so it’s understandable why the government would want to regulate it. Aside from no player protection, gambling sites can also be used for money laundering by criminals. In that sense, I think it’s better for casinos to be regulated than not. Because if they’re unregulated, they’re always in the frying pan of the government’s eyes, anytime they can shut it down or go after the operator.

[Reatim]

So what's your take on decentralized gambling?  Do you think it really promotes freedom, or is it just another option to commit fraud and money laundering in the guise of promoting freedom?

honestly centralized or decentralized doesn't really matter since both can be used for fraud or money laundering purposes yes granted it will be easier to do it with decentralized ones but even centralized ones can't fully eliminate the chances of it happening

and even for casual gamblers, all the pros you have mentioned for decentralized casinos are helpful and actually would be preferred by them but this doesn't mean they are planning to launder money already

[Charles-Tim]

According to this article: The Main Advantages of Decentralized Casinos, decentralized casinos offers freedom to their users by removing intermediaries and allowing them to gamble directly from their wallet.  It also gives an instant payout since the winnings are directly deposited into the user.  It stated that:

I do not think decentralized is the right word that you should use for this type of gambling sites, but I think you can use web3. Web3 was proposed to be decentralized, but they are centralized. If you take deep look at the casinos, they are centralized and not decentralized. At least all of them that I know are not centralized.

On the other hand, I also read that decentralized gambling can be a tool for fraud and money laundering. Since transfers are often unregulated due to instant and automatic payout, it is said that this is prone to fraud and money laundering due to:

Just like is said, they are centralized. I have not seen any true decentralized gambling sites.

[Die_empty]

So what's your take on decentralized gambling?  Do you think it really promotes freedom, or is it just another option to commit fraud and money laundering in the guise of promoting freedom?

My stand is that decentralized casinos are mainly designed to promote freedoms and privacy. They reflect the true nature of Bitcoin and other cryptocurrencies that promote decentralisation. Just like every other good invention, bad actors will always want to take advantage of it.These bad actors are the ones who are giving the sector a bad name, which has necessitated government strict regulations. Therefore,  the notion that decentralized casinos are established to promote fraud is a false generalization.

[shield132]

In order to judge fairly, we need to see a truly decentralised casino. Which casino is a good example of a decentralised casino? I would love to see that because the casinos that I've seen in the past that were calling themselves decentralised, weren't a good destination for gambling because of a very poor user experience, so I haven't been in touch with them for years and I would love to see what decentralised casino is trendy today.
Is it possible for decentralised casinos to acquire a gambling license? Can such a casino be licensed and also offer complete freedom to its customers? If not, then I believe such a casino can't be a legit one because, according to the laws, they shouldn't exist without a license and if they have a license, then they shouldn't be able to offer complete freedom to their customers and which answers the question that OP asked.
Btw, a centralised casino with decentralised game or some sort of decentralisation is very possible and Metawin.com is a good example of that.

[Alvin_talk]

Both decentralised and centralised gambling comes with risk of fraud. But I think we need to weigh the risk involved.

For centralised gambling, you deposit money into the Casino's account, trusting them to pay if you win. Imagine if the company shuts down suddenly, what will happen to your funds?

For decentralised gambling on the other hand, run on a blockchain instead of being controlled by a company or a central authority. Now imagine if there is a bug in the smart contract, attackers/ hackers will exploit this and drain funds.

For me, both are risky. I will advice you choose the risk you are more comfortable with 

[Ronsbit]

We should all know that there are both good and bad actors out there, and the bad actors are always more active than the good, so therefore any medium or platform that creates or avails opportunity for them to operate, they take such chances and do their dirty deeds. The crypto industry so far promotes privacy, and this is what bad actors thrive upon, although the crypto industry was created for a good purpose, but the bad heads always have their way in, and this is why the government always comes up with regulations to checkmate activities and also to control the system to be void of bad operators. So in essence, decentralization promotes freedom, which allows one to be able to do their thing without anybody's consent and knowledge, but evil perpetrators would never relent from their wicked acts, hence governments' intervention through regulations and policies to protect their system and structure, and also to take what belongs to them which the decentralized system wants to take away from them.

[freedomgo]

For me, both are risky. I will advice you choose the risk you are more comfortable with 

There’s a reason why most gambling we see is centralized and not decentralized. It’s not really our choice, it’s because governments would treat a decentralized casino as something illegal, with no security for us or even for the one running it. So we end up playing on centralized casinos instead.

Sometimes they don’t even require KYC, which is fine for me. Of course we’d want something automatic like Bitcoin on the blockchain, decentralized and trustless, but right now it’s just not possible.

[serjent05]

I highly agree with you guys that decentralized gambling was created to promote freedom and remove intermediaries, but as much as the creation of such platform is aim for good intention, others play as bad actors creating platform not to do good but defraud their player by modifying the supposed to be decentralized smart contract into a centralized one and pretend to be decentralized and later use it to inject malware to empty their players wallet.

Aside from that, criminals use this decentralized service to launder money, since there is no regulation involved and automatic payout without censorship is implemented, bad actors can do whatever they want to do to launder money.

Decentralized gambling is created to have more freedom, and up to date, there are already decentralized gambling platforms that have been launched, like DAO-based gambling.  I believe some of us here played Lottery and Dice apps created on alternative coins network like Tron or Ethereum.

[goldkingcoiner]

Unless there is an entire protocol created ad hoc for gambling, I didn't see any real "decentralized" gambling platform.
I don't think that a platform like this could ever fraud someone (excluding hacks and rugg pull )
in the past there was WAGERR or similar experiments with crypto, but the real concept of decentralization it's not easy in real life (probably I would say impossible).

Exactly what I was going to say. There are no real decentralized gambling platforms, only centralized gambling platforms which falsely market themselves as decentralized.

A real decentralized gambling platform would be open source, so you can see how everything works. It would also not be controlled by a single entity or group and neither would the wallets/funds/winnings of the users.

But something like a gambling casino is too complex and dependent on custodial actions to make decentralized.

[danherbias07]

Although decentralized without KYC or something that will trace back to the owner. I think they should be strict with the rules of wagering requirements to avoid fraud.
In case a gambler deposits $100, he must wager at least double that amount or maybe even higher. This is to prove that they are really playing and ready to lose, which means they are real gamblers and not just those who will act to launder money.
Even if it is decentralized, there should be rules that the gamblers must follow, and this is to avoid having problems with those who audit it.

[₿itcoin]

Yes, it is true that decentralized casinos will allow you to withdraw much faster and in a relatively easy way because they do not have to answer to the government, in this respect it promises transparency, so I definitely prefer non-kyc casinos.

However, the real problem is that since there is no KYC and no certified policy makers, these casinos have become a big arena for fraud and money laundering due to lack of regulation. Moreover, if you are a victim, you cannot take any action against them because they are beyond the reach of detection. So in many countries you will see that any Virtual Asset Service Provider has to work under AML policies. If you look at the reports of Chainalysis, you will understand that these crypto platforms are widely used for illegal money laundering. Especially stablecoins and centralized exchanges are responsible for this. So if these platforms follow the true rules and conditions that they describe in their TOS, they are good for privacy and innovation. If they don't, it can become a clever playground for fraud & deception.

[davis196]

The haters of decentralization will keep yapping about fraud and money laundering, as if fraud and money laundering doesn't exist in centralized and regulated casinos. How can someone launder money in a crypto casino? Deposit the coins and bet everything on red? What if the money launderer loses everything. Decentralized casinos can defraud and scam their customers, but what about all the centralized casinos, that scam their customers via "failed KYC procedure" or other BS excuses? With big freedom comes big responsibility. Some people will always hate freedom and stick to what's familiar.