Where did the anonymous gambling journey begin?
When Satoshi Nakamoto launched Bitcoin in 2009, one of his key ideological objectives was to provide an anonymous platform for people to send and receive funds without jurisdictional barriers. In that respect, the pseudonymous developer achieved his goal. Users from all over the world are now free to transact in a peer-to-peer, decentralized environment without interference from governments or third party intermediaries.
However, the benefits of Bitcoin and its alt-coin counterparts are not reserved just for financial transactions. On the contrary, practically every industry is now set for disruption. The online gambling sector is just one of these, with more and more online casinos now specializing purely in cryptocurrency deposits and withdrawals.
As a result, it is now possible for players to bet in an anonymous gambling environment. This opinion piece will explain how the specificities of cryptocurrencies allows players from anywhere in the world to gamble without revealing their identity.
KYC controls ensure anonymous gambling is not possible
No matter where you are located in the world, gambling legislation concerning KYC (Know-Your-Customer) is fairly standardized. The usual process requires a new player to open an account by providing a long list of personal details, such as their full name, address, date of birth and telephone number. Next, the player will then enter their payment card and make a deposit in their local currency.
Legislation will then dictate that the player must submit documents confirming their identity when a withdrawal request is made or within 72 hours of the account being opened – whichever occurs first. The KYC process most commonly demands a government issued ID card (such as a passport or driver’s license) and a proof of address (such as a bank statement or utility bill).
Some online casinos take things one step further, by requesting additional documents such as a copy of the player’s payment card, a notarized copy of their ID, or even a screenshot of the player’s online bank account showing the original deposit. These KYC requests are highly frustrating for the player, so why do online gambling platforms ask for it?
Why do online casinos ask for countless amounts of documents?
Fundamentally, online casinos request documentation to ensure they remain compliant with domestic anti-money laundering (AML) regulations. This is a top to bottom approach, which looks something like the following. Global AML standard setters the Financial Action Task Force (FATF) release recommendations as to how national governments should combat the threats of financial crime.
Governments then create legislation that mirrors the recommendations of the FATF. This includes provisions to ensure that online casinos do not facilitate anonymous gambling. Next, gambling regulators then police the operators that they issue licenses to, with the threats of sanctioning should the operator fail to comply with the regulations. This is called CDD (Customer-Due-Diligence) and refers to feeling satisfied that you know who your customer is, where they come from and that the funds were obtained legitimately.
These regulations are created specifically against the laundering of real-world money such as the U.S. dollar, Euros or Japanese YEN, otherwise referred to as fiat currency. To illustrate the problem that society faces, it is estimated that more than $800 million to $1.5 trillion of criminal proceeds are laundered each and every year. However, as will be discussed below, Bitcoin is not classed as really-world money, so casinos that accept it as a means to deposit and withdraw have no problems in allowing anonymous gambling.
Bitcoin is not money, so does anonymous gambling gets the green light?
To understand why it is possible to gamble anonymously when depositing and withdrawing Bitcoin, it is highly relevant to understand how cryptocurrency is defined. Fiat currencies have some clear characteristics, which are listed below
Firstly, it must be maintained by a Central Bank that has the ability to control its supply through intervention methods. This could range from quantitative easing programs to the setting of interest rates. As Bitcoin is controlled by no single authority, its supply cannot be manipulated. Instead, new coins are issued on an incremental basis until the total supply reaches 21 million coins. At this point, no more coins will be issued.
This means that unlike fiat currencies, Bitcoin will never experience inflation. There is also a disparity in the characteristics of Bitcoin and fiat currency by the fact that the former is an intangible medium of exchange. Its digital nature means that it cannot be touched, felt or handled and subsequently, can never change hands. It is the aforementioned specificities that means crypto-only casinos do not need to conform to the same set of stringent regulations as their fiat currency counterparts and as such, allow players to gamble anonymously
How does anonymous gambling work?
When you have chosen a Bitcoin casino to register with, most will only ask you for your email address. This is to ensure that the casino has some way of contacting you, or if you forget your password and need to reset it. Once you have completed this 30 second process, it is then time to make a deposit.
As you are not using a payment card or bank account, you do not need to provide any personal details. Instead, you need to head over to your Bitcoin wallet and then transfer the desired amount of coins to your betting account. This process normally takes 10 minutes for the funds to reach your account.
Although this is longer than the instant deposits usually available when using a debt or credit card, using Bitcoin does mean that your withdrawals will be received significantly quicker. Most commonly, fiat withdrawals will take three working days for the bank to process your payment, which comes in the form of a merchant refund. However, you will also need to wait a few days for the online casino to process your request and to ensure they are satisfied with your KYC documents.
When you use a Bitcoin casino, you normally receive your withdrawals in no more than a couple of hours, although there are some sites that process this within a few minutes. The most important thing to remember is that you do not need to provide any identification at any point, subsequently allowing you to gamble anonymously.
If you want to take things one step further, you can also use an anonymous browser such as Tor. This will obscure your true location by bouncing your IP address over multiple servers, making sure that online casinos do not know where you are based. This isn’t necessary though, as most online cryptocurrency casinos are not interested in where you are based.
Why do people want to gamble anonymously?
There is often a misconception that anonymous gambling is associated with criminal intent. This could not be further from the truth. It is important to remember that when you spend cash in the real-world, you are essentially doing that anonymously. You do not need to give you name, address and date of birth when you visit your local betting shop or horse racing track, so why should you have to do it when you gamble online?
There are also issues regarding government oppression when it comes to accessing online gambling products. For example, if you are based in nations such as the U.S., online gambling is prohibited in all but its entirety. As Bitcoin gambling sites do not discriminate against nationality, anyone from any country can play. Furthermore, as gambling with Bitcoin is not the same as gambling with fiat currency, usual gambling regulations do not apply.
A further factor driving people to the world of anonymous gambling is that when using conventional fiat payment methods, deposits and withdrawals will appear on your bank statement. Partners often have joint accounts, so it is with good reason that players would prefer their gambling activities to remain private. Not only this, but when applying for credit, lenders might feel uncomfortable knowing that you like to gamble. We know that recreational gambling is no different from any other hobby, however unfortunately banks do not always agree.