The Australian government has cracked down on online gambling by banning crypto and credit card use for online bets. The measure comes as an effort to reduce investors’ losses in the country.
Australian Gov’t Bans Use Of Crypto In Online Gambling
On Monday, The Canberra Times reported that Australians are prohibited from using cryptocurrencies and credit cards to engage in online gambling. The ban, announced in January, was set to be enacted today.
The Australian government offered a six-month transition period for gambling companies, allowing them to make the necessary changes and alert users of the soon-to-be-enacted ban. According to the report, companies that do not comply with the new ruling could face fines of up to AUD$ 234,750, worth around $150,000.
Moreover, the ban includes credit cards linked to digital wallets, Bitcoin and other cryptocurrencies, and any new form of credit. As a result, the new rule brings online gambling regulation in line with the land-based gambling rules.
However, it does not affect online lottery payment, which still allows credit card use. Kai Cantwell, Chief Executive of Responsible Wagering Australia, urged the Australian government to equalize regulations among all gambling forms:
If consumer protection measures aren’t consistent across all forms of gambling it will incentivize vulnerable Australians to move to less-regulated types of gambling, where they are more at risk of harm.
Per the report, the government’s crypto usage ban for online gambling comes as an effort to prevent Australian citizens from “gambling away money they do not have” and minimize the gambling harm.
Problem Gambling In Australia
Michelle Rowland, Australia’s communications minister, explained that the Australian government is working on “benefiting thousands of vulnerable Australians” with their crackdown on online gambling platforms.
Gambling is a popular pastime activity among Australians. The country has a long story with the industry, which rapidly grew in the mid-90s. In 2007, Australia had the highest gambling rate in the world, as 80% of the adult population engaged in it.
In 2022, online gambling became the fastest-growing sector of the industry. According to the Australian Institute of Health and Welfare (AIHW), problem gambling is a major public issue in the country, with an estimated $25 billion in losses on legal forms of gambling each year. This figure represented the largest per capita losses in the world two years ago.
17% of Australian adults used online casinos in 2022. Source: Australian Institute of Health and Welfare
Using cryptocurrencies to gamble is not a new issue in the crypto industry. As reported by Bitcoinist, one of the developers of the Solana-based Cypher protocol gambled away the project’s funds. In May, one of the core developers of the protocol confessed to stealing $300,000 in different cryptocurrencies from Cypher’s wallets to fund his gambling addiction.
Per the report, the developer lost the funds from the Cypher Redemption Package after gambling them away, affecting thousands of users and leaving little to no hope of retrieving the investors’ funds.
It’s worth noting that, despite being a growing issue, problem gambling is not inherently related to crypto, and cryptocurrencies are not the cause of gambling addiction.
However, some studies and surveys conducted in the UK have pointed out that at-risk people perceive crypto investments as a form of gambling and “are experiencing harm from investing in cryptocurrencies and other high-risk trading products, experiencing similar difficulties that people report with gambling harms.”
Bitcoin (BTC) is trading at $67,092 in the weekly chart. Source: BTCUSDT on TradingView
Featured Image from Unsplash.com, Chart from TradingView.com
