UK Crypto Gambling Sites

What’s the UK crypto regulation on gambling

By all means, it is not illegal to use cryptocurrencies as a currency for gambling, or any other type of transaction. The fact is that currently, there are no crypto-friendly gambling sites that hold a UKGC license. You will have to resort to offshore ones. Of course, that does not mean that you will get a subpar experience. Many such brands offer equal, if not better, products compared to established websites. Just make sure you proceed to diligent research beforehand, starting with the respective reviews of our recommendations.

Nonetheless, you need to keep in mind that Her Majesty’s Revenue and Customs (HMRC) views cryptocurrencies as a capital asset, which means that it is possible that you are susceptible to a crypto tax in the UK. Let’s expand the topic a bit further.

Are my crypto transactions tracked

It is important to clear this out. First of all, you should know that all transactions made within a blockchain network are transparent and permanently embedded in the blockchain. If your crypto addresses get compromised, anyone can track all the details of your transactions. There are only a few notable exceptions to this, like Monero, where the blockchain is built in a way that obscures the addresses of the sender and receiver.

Moreover, in order to operate in the UK, all centralized crypto exchanges are required to share all of their relevant data with HMRC. Consider that all your acquisitions are compromised. The only way to avoid this is to rely exclusively on decentralized exchanges, but that will make the act of acquiring cryptos with Fiat funds quite challenging. It can always be done with offshore exchanges and coin mixers, but this is a topic for another article. What you need to remember is that HMRC knows the cryptos you have bought via centralized UK exchanges.

How is crypto gambling treated in other Commonwealth nations?

Following suit in the general legal confusion that exists on this topic worldwide, there is no common approach. In most countries, it’s a combination of online gambling laws and capital gains. However, the grey status of cryptocurrencies as an asset complicates the matter further.

For example, crypto gambling sites in India let locals access the best international iGaming brands legally. However, the situation around crypto assets does not look promising, as the new frameworks under discussion include heavy taxation.

Similarly to India, crypto casinos in Australia are not illegal, and many Aussies prefer them for their online gambling sessions. But fiscal laws around crypto assets are quite hostile and you may get taxed for converting any crypto to Australian dollars or other Fiat currencies.

Bitcoin casinos in Canada are a primary gateway to international brands now that the dust has not yet settled after the introduction of the Ontario local license. But even here, if you exchange cryptos for Fiat, it’s considered a taxable event. So regardless of where you live, the use of anonymous wallets is essential. And the conversion of crypto balance to Fiat in centralized exchanges must be a last resort.

Currently, UK players do not have to pay tax on any gambling winnings. However, what happens when you receive winnings in the form of crypto? The current UK crypto regulation mentions that every time you sell crypto for a Fiat currency like GBP, trade crypto for another coin/token or spend it on goods & services, you will have to pay capital gains tax.

However, the tax applies only to any gains made, meaning you sold or exchanged the crypto winnings for a profit. This is a bit tricky, as there is no standard way to determine the initial value of your winnings the moment you win them (in order to establish a cost basis). The optimal solution is to archive any single transaction you make, like receiving winnings from the gambling site, sending them to the exchange, etc.

Moreover, the capital gains tax rate depends on your current Income Band, which can be highly variable. So, in case you score a big win, we recommend contacting a tax consultant, as things can get messy easily. Better safe than sorry.

But there is a very important rule that applies to many players. The Capital Gains Tax Free Allowance mentions that if someone does not profit more than £12,300 in a fiscal year from capital gains, he does not get to pay any tax on it. This amount is more than enough for many crypto gamblers, meaning that they do not have to worry about any taxes at all. Just do not forget to report the amounts to your tax return.

*Keep in mind that this is meant to be a general overview of the current fiscal situation. As we are not financial advisors, contact a tax professional for your financial inquiries; errors may lead to significant losses & potential fines.