The UK Gambling Commission released a statement on Tuesday warning casinos about accepting crypto betting and assets linked to cryptocurrencies.
The statement warned of several risks related to money laundering and terrorist financing, including AI, money services, and cryptoassets.
On the risk of cryptocurrencies, the Commission stated, “cryptoassets present several vulnerabilities from a money laundering and terrorist financing perspective.”
They went on to add, “When customers indicate their funds to gamble have come from cryptoasset trading or other means linked to cryptocurrencies, it is the Commission’s expectation that this feeds into a customer’s risk profile as a high-risk indicator with sufficient due diligence then completed.”
The rise of crypto betting
The statement reflects the growing interest in crypto betting across the globe and the difficulty of regulating the industry.
Crypto betting has grown from a $50 million industry in 2019 to $250 million in 2024. This pales in comparison to the UK betting industry, however, which generated $19 billion in revenue last year.
Crash games
The statement also mentioned the growing popularity of crash games on crypto betting sites and their spread to operators in the UK.
Crash games are defined as games where “once the initial bet is made, the round begins with a starting multiplier, which grows as the game progresses. Customers have the option to cash out at any point, but if the game crashes before a customer has cashed out, they will lose the money from the multiplier as well as their stake. Rounds can last anywhere from a few seconds to a couple of minutes before either the game crashes or the customer cashes out.”
The Commission warned that “crash games are highly volatile and can lead to significant losses for players.”
It went on to state, “We have been made aware of an increased interest in crash games within the legal, licensed casino sector, so we are drawing operators’ attention to the risks of this game type.
“There are concerns that products of this nature can allow criminals to camouflage the high-risk behaviour of cashing out quickly with limited gameplay within the context of the crash game (where these behaviours are inherently more common), and that transactional monitoring controls may not be effective in detecting suspicious activity.”
Crash games are popular on crypto betting sites due to their alignment with decentralized, anonymous betting. According to some reports, more than 50,000 users play across multiple crypto gambling platforms.
Due to their fast nature, they can generate high rewards but also make big profits for companies. Stake, one of the biggest crypto betting sites, generated $2 billion in revenue in 2023 with a large proportion of that from crash games.
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