In recent years, crypto or Bitcoin casinos and sports betting sites have become more and more popular. Around the world, more people are moving to these sites for various reasons, and the same is true of the UK.
However, the UK is home to some of the most strict gambling regulations in the world. And while not illegal, crypto or Bitcoin casinos and sportsbooks cannot hold a UKGC licence. So, what does this mean for UK players and the UK economy, especially in terms of paying tax on any winnings?
Are crypto casinos and betting sites legal in the UK?
This is a very grey area at the moment. Any casino licenced by the UKGC cannot offer cryptocurrencies or crypto assets as one of the available payment options. If it does, then the licence will be revoked. Technically, this means that UK players are not given access to crypto sites. But, many Bitcoin casinos and sports betting sites do allow and accept UK players, they just do so under different licencing jurisdictions.Typically, these crypto sites will hold a licence from Curaçao or Gibraltar. As such, they're still offering a secure gaming platform. Players can benefit from this, making sure that they can access a wide array of betting options in safety. So what does this mean for paying your taxes in the UK?
Do I have to declare crypto wins?
The short answer here is — no — you don't have to tell the Inland Revenue about any gambling wins unless you are a professional gambler. So whether you play at a UKGC-licensed site or an overseas Bitcoin casino and place a winning bet on Arsenal to win their next away match or win big on the slots, you won't have to pay any tax on those wins. The only difference to the UK economy is that UK-licensed sites will pay tax on their revenue, while offshore Bitcoin casinos will not.Will the UK regulate crypto casinos?
At this time, this is very unlikely. The UK has rejected calls to regulate crypto trading as gambling instead of as a financial service, though it's still working on the final rules and regulations. The UKGC still takes a bit of a hard-line stance against gambling using crypto though, not permitting it across any betting site that it licences.The reason for this is all about the casino or betting site's ability to determine the source of the funds. Essentially, the main goal of the UKGC in this instance is to prevent money laundering or funds from criminal activities being funnelled into the gambling sector. With the attraction of crypto casinos being anonymity, it becomes very hard to trace any transactions from these sites, hence the no-regulation.
This does mean that UK players are advised to not play at any site offering crypto. But, this doesn't mean players will get into trouble if they're caught playing on one, and they definitely won't have to pay tax on any wins. It's simply not recommended due to potential safety and security issues. But, by choosing where to play wisely, these casinos are just as secure as a UK licenced one.
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