Cryptocurrency is revolutionizing the way we invest, purchase goods and services, and play. Naturally, cryptocurrency has found a home in the world of gambling, where casinos have taken advantage of the decentralized nature of the crypto industry to create innovative new gambling methods that let users play from anywhere safely and securely—and most importantly, privately. However, the crypto gambling world is still in its infancy, and as such, the rules and regulations governing it aren’t always clear.
This has left many Canadians unclear about whether crypto gambling sites are legal in Canada. In this article, we will take a look at the rules and regulations governing crypto in Canada and whether it is legal for Canadians to gamble in crypto casinos.
Here’s what you need to know:
What Is a Crypto Casino
A crypto casino is an online casino that primarily uses cryptocurrency as the medium of exchange. Crypto gambling websites come in many forms, but in general, they allow users to fill their accounts with cryptocurrency in order to buy tokens (often depicted as coins or gems) to use when playing casino games. Players’ winnings are then withdrawn in the form of cryptocurrency. Some crypto casinos offer only one or two crypto options, while others may accept dozens of different crypto coins. You can find an ultimate guide to the top-rated crypto gambling sites recommended by BestCasinoBitcoin.com.
There are different types of crypto casinos, ranging from the traditional to the provably fair. A crypto gambling site that uses traditional gaming is similar to an online casino / online gambling sites in Canada that accepts fiat currency. The games are run using random number generators but generally rely on players trusting the casino to provide fair gaming. Many of these casinos offer both crypto and fiat funding options. On the other hand, provably fair casinos are built exclusively on the blockchain and rely on the blockchain to ensure that the outcome of every game is random and that the fairness of each round of game play can be verified by both the casino and the player. In general terms, a provably fair game provides codes to both the player and the casino which can be verified against copies on the blockchain after the conclusion of game play to show that the outcome was both fair and determined before the round of play, thus preventing cheating.
What Are the Benefits for Crypto Gambling Sites
Crypto casinos have a major benefit over casinos that use fiat currency in that they are much more private and can help players keep their game play away from prying eyes. For instance, traditional casinos rely on the banking system. When a player deposits money or withdraws winnings, that money goes through banking intermediaries (such as banks or credit card companies), which maintain a record of those transactions. This produces a delay as money moves through third parties. By contrast, crypto casinos perform transactions exclusively through the blockchain, which allows for nearly instant transactions and also privacy. Crypto transactions are anonymous on the blockchain, and because the records are stored on the blockchain in a nearly unbreakable code, players don’t have to worry about third parties spying on their gambling.
On the other hand, it is the very secrecy of crypto gambling that concerns regulators, which prefer to have records of transactions in order to better regulate casinos. The advent of provably fair gaming has made it easier to confirm that a casino is operating on the up-and-up, which is why many gamblers who use crypto choose provably fair gaming options.
The Legality of Crypto Casinos in Canada
Within Canada, the legality of crypto gaming is a bit of a legal gray area. There are two levels of regulation involved. Crypto casinos are regulated at both the provincial and the federal levels. Gambling is legal in Canada, but as of this writing, the law is silent in terms of regulations specifically covering crypto gaming. As a result, crypto gambling is neither forbidden by law nor specifically authorized by law. By general common law principle, therefore, which says that anything not explicitly prohibited is therefore permitted, most legal experts believe that crypto gambling is de facto legal. However, players are cautioned to take precautions and follow their province’s gambling regulations and laws.
Now, while that might sound like a blank check to start gambling anywhere online and reaping the rewards, that is not entirely true. Other laws still apply when it comes to crypto casinos. For example, anti-money laundering laws apply to cryptocurrency. These laws require any virtual currency exchange operating in Canada to register as a money service business and follow Canada’s AML regulations. Beyond this, the money that you win at a virtual casino is treated as taxable income by the Canada Revenue Agency. For this reason, you are required to keep a detailed record of your transactions for tax purposes, thus undercutting a bit of crypto’s promise of anonymity.
Virtual Private Networks
In general, it is legal for Canadians to gamble at offshore crypto casinos, so long as they play by their province’s gambling, reporting, and tax rules. However, some casinos may not be available to Canadian bettors due to geographic or other restrictions. Many Canadians use virtual private networks to get around these restrictions and use sites that might otherwise be blocked. This can create some legal problems if you are using VPNs to circumvent provincial laws or evade taxes. The best advice is simply to avoid trying to do an end-run around the law. After all, your winnings won’t be any good to you if the government discovers you’ve been cheating them out of taxes.
Conclusion
The bottom line is that there are plenty of legal ways to engage in crypto casino gambling in Canada, as long as you are aware of your province’s rules, regulations, and laws. In order to get the most out of your crypto gaming, it’s a good idea to consult a reputable source to make sure you know your province’s rules before you get started. It’s also highly advisable to keep good records of your wins and losses so you can be sure to accurately report your winnings to the government come tax time.
