The Australian government has cracked down on online gambling by banning the use of cryptocurrencies and credit cards for online betting. This measure comes in an attempt to limit investors' losses in the country.
The Australian government bans the use of cryptocurrencies in online gambling
On Monday, The Canberra Times mentioned Australians are prohibited from using cryptocurrencies and credit cards to engage in online gambling. The ban, announced in January, was due to take effect today.
The Australian government has offered a six-month transition period to gambling companies, allowing them to make the necessary changes and alert users of the ban that will soon take effect. According to the report, companies that do not comply with the new ruling could face fines of up to 234,750 Australian dollars, the equivalent of about 150,000 Australian dollars.
Furthermore, 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 land-based gambling rules.
However, this does not affect online lottery payouts, which still allow the use of a credit card. Kay Cantwell, CEO of Responsible Wagering Australia, urged the Australian government to equalize regulation across all forms of gambling:
If consumer protection measures are not consistent across all forms of gambling, they will incentivize vulnerable Australians to move to less regulated forms of gambling, where they are more at risk of harm.
According to the report, the government's ban on the use of cryptocurrencies for online gambling comes as an attempt to prevent Australian citizens from “gambling with money they don't have” and reduce the harms of gambling.
Problem gambling in Australia
Australian Communications Minister Michelle Rowland has explained that the Australian government is working to “benefit thousands of vulnerable Australians” with its crackdown on online gambling platforms.
Gambling is a popular leisure activity among Australians. The country has a long history with this industry, which grew rapidly in the mid-1990s. In 2007, Australia had the highest rate of gambling in the world, with 80% of the adult population participating in it.
In 2022, online gambling has become the fastest growing sector in the industry. According to the Australian Institute of Health and Welfare (AIHW), problem gambling is a major public issue in the country, with losses from legal forms of gambling estimated at $25 billion each year. This figure represents the largest per capita loss in the world in two years.
17% of Australian adults used online casinos in 2022. Source: Australian Institute of Health and Welfare
The use of cryptocurrencies for gambling is not a new problem in the cryptocurrency industry. As reported by Bitcoinist, one of the developers of the Solana-based Cypher protocol has gambled away the project's funds. In May, one of the protocol's core developers admitted to stealing $300,000 in various cryptocurrencies from Cypher wallets to fund his gambling addiction.
According to the report, the developer lost money from the Cypher Redemption Package after gambling it, affecting thousands of users and leaving little to no hope of recovering investors' money.
It should be noted that although it is a growing problem, problem gambling is not inherently linked to cryptocurrencies, and cryptocurrencies are not a cause of gambling addiction.
However, some studies and surveys go run In the UK, they note that vulnerable people view cryptocurrency investments as a form of gambling and “experience harm from investing in cryptocurrencies and other high-risk trading products, and experience similar difficulties reported by people with gambling harm.”
Bitcoin (BTC) is trading at $67,092 in the weekly chart. Source: BTCUSDT on TradingView
Featured image from Unsplash.com, chart from TradingView.com
