UK Cracks Down On Bitcoin Gaming Operators

bitcoin, UK Gambling Commission

“The currency is irrelevant,” said the UKGC, as it warned bitcoin operators that they must be licensed to engage with UK customers. (Image: coin-turk.com)

The UK Gambling Commission (UKGC) has warned bitcoin gaming operators that they are not outside the law and that all companies offering gambling to UK citizens require a license, regardless of the currency in which transactions are conducted.

UKGC has written to a number of operators clarifying that while bitcoin itself is an unregulated currency, bitcoin gambling falls under the UK’s gambling regulations.

These operators, said the regulator, has been offering prizes of money or “money’s worth” to gamblers. The bitcoin sites fall under the category of “money’s worth.”

“We wrote to these operators because they were either advertising gambling illegally or illegally offering gambling products to consumers, or both, said UKGC CEO Jenny Williams. “The Commission neither prohibits nor encourages bitcoin; we are interested only in ensuring the proper regulation of gambling products consumed in Britain.

Plans To Regulate Cryptocurrency

“The currency is almost irrelevant as all operators need to satisfy themselves, and us, that they can fully meet all our requirements, particularly the requirements that ensure crime is kept out of gambling and consumers are protected,” she continued.

The commission reiterates that “an operator needs to be licensed by the Gambling Commission regardless of where they are located in the world, if they provide facilities for gambling to consumers in Great Britain.”  

In 2013 the UK government proposed that bitcoin businesses would be exempt from regulation and licensing, as bitcoin did not constitute legal tender.

The tax authority disagreed, however, arguing that bitcoin should be classed “single purpose vouchers,” which makes transactions liable for sales tax.

In March this year, the government announced its intention to regulate crypto-currency exchanges to put a stop to their use as money-laundering hubs and help protect consumers.

Micon Faces Charge

In the US, meanwhile, poker player Bryan Micon has become the first bitcoin-only operator to be prosecuted for offering unlicensed online gaming.

Micon flew to the US last week to face one charge of operating an unlicensed interactive gaming system in relation to his role as chairman of now-defunct Seals With Clubs, the former market-leading bitcoin only online poker room.

Micon’s attorney, Richard Schoenfeld, has said his client will accept a plea bargain, which will see him avoid a maximum ten years in prison.

Micon will likely complete an as-yet-undetermined probation and pay a $25,000 fine, at which point the felony charge will be reduced to a misdemeanor.

He will also forfeit the computers, $900 in cash and 3.0996 bitcoins confiscated during a police raid on his Las Vegas home last February.

According to court documents records seized during the raid suggest that Seals With Clubs was bringing in around $10,000 to $12,000 in profits each month.

Philip Conneller
Written by
Philip Conneller
As part of the team that launched Bluff Magazine back in 2004, and then as Editor of Bluff Europe, Philip Conneller has (probably) written thousands of articles about poker and has travelled the globe interviewing the greatest players in the world, not to mention some of the sexiest celebrities known to man in some of the world’s sexiest destinations. The highlight of his career, however, was asking Phil Ivey (as a joke) how to play jacks, and emerging none-the-wiser. Philip once won $20,000 with 7-2 offsuit. He has been told off for unwittingly playing Elton John’s piano on two separate occasions, on different sides of the Atlantic Ocean. He became a writer because he is a lousy pianist. He lives in London where he spends his time agonizing about Arsenal football club, yet in Wenger he trusts.

Comments

Chris wrote...

Since the UKGC warning and because the need in license, both operators and platform providers are now dividing the services to the GEO targeted players.

This is not new of course

Chris.

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