Bitcoin launched in 2008 with little fanfare and attention. When the Silk Road marketplace took off in 2013, authorities began to pay attention. It represented a medium of exchange that moved value and raised several implications. Since then, authorities are still scrambling to regulate and tax cryptocurrencies and crypto gambling coherently.
Sports betting using crypto has raised the stakes even further. Most countries rely on general gambling and betting regulations. However, most of these regulations need to be improved in the digital age and in the blockchain era. Still, crypto gambling and sports betting platforms have to make do with existing regulations. Accordingly, crypto-gambling enthusiasts have certain laws that govern their declaration and taxation of gaming winnings. The global landscape is improving with time, and cryptocurrency is far from its fringe asset in 2009.
It starts with how a country regulates cryptocurrency itself
Well, you can’t use it to wager if you can’t legally own it, right?
There are a few counties that have banned crypto outright. These include China, Bangladesh, Egypt, and Algeria. Crypto gambling platforms can’t operate in these jurisdictions for obvious reasons. The reasons for banning crypto vary, but the bottom line is that users and operators cannot use crypto conveniently.
For most western countries, crypto ownership is legal with regulations of varying strengths. There are countries like the USA and Italy that tax gains from crypto as property taxes, with capital gains taxes applicable. Others, like the UK and Germany, apply standard income tax to crypto profits.
Taxation of crypto gambling
Crypto gambling is a whole other matter. On the one hand, it feels like the wild west because of the borderless nature of crypto. National tax agencies rarely provide crypto taxation-related data. Many crypto holders have to find footing amidst all the uncertainty and need for clarity.
Most countries extend laws that apply traditional gambling to crypto gambling. If you live in a country where you generally have to pay taxes on gambling winnings, it is smart to extend the same to your crypto gambling winnings. Countries such as Australia, Austria, Canada, the UK, and a few others don’t tax gambling winnings generally. Therefore, your crypto gambling winnings will not be in the taxman’s crosshairs.
These exemptions apply with context. Some of the listed countries apply taxes if you are gambling as part of a business. Several other countries have applicable taxes on crypto gambling winnings by default. They include the USA, India, Spain, and Mexico. Notably, Americans pay a 24% flat tax on their winnings. Capital gains taxes are a tricky concept for crypto because of how much value changes. Therefore, you should note the value of your coin at specific times of purchase, sale, or withdrawal to ensure your tax filings can be coherent.
There are a few caveats to this rule, such as if you’re gambling as part of a business. On the other hand, here are some examples of countries that tax gambling winnings for citizens. Therefore, it is vital to look up local taxes and consult an attorney if you are unsure of the provisions.
Personal record keeping is vital
Many crypto holders disregard taxation outright. Enforcement of crypto taxes is rare because of the non-mainstream nature of this asset. Nonetheless, compliance is essential to avoid running afoul of tax laws. Some of the regulations can be to your benefit. For example, a country that taxes crypto as property could have a loophole allowing you to claim tax deductions from your crypto losses when filing returns.
Therefore, have a personal record of transactions related to crypto. These records cover everything from trading to gambling. A simple notebook or excel entry of prices at purchase and selling or winnings can go a long way in your compliance.
Running a gambling business
The implications for those running a crypto gambling business differ from ordinary crypto holders. For one, obtaining the proper licensing to carry out the business is vital. Licenses such as the UK Gambling Commission and the Curacao gaming licenses require a commitment to comply with local regulations such as taxation.
Online crypto gambling platforms can be big business. Most countries have applicable laws on casinos and online gaming platforms with taxes between 20-50% on profits. Most sportsbooks have records on bets, and tracing revenue should be easier for authorities than for individual crypto gamblers.
The tax revenue from crypto sportsbooks is significant. New York had a u-turn on online betting after the state house considered the potential windfall from extra gaming revenue. Therefore, online sportsbook operators must always be aware of their tax obligations because it is crucial to why many countries allow them to thrive.
Wager while monitoring your taxes on BC.GAME
The crypto gambling regulation landscape has significant variations from country to country. There is somewhere you can sail into the sunset with your betting winnings, while others will take a percentage of it in taxes. This space will continue to mature and get more specific as regulators ponder how to legislate on this unique asset.
BC.GAME is your casino destination for all the online gambling and sports betting excitement you need. As a professionally licensed operation, the platform is committed to ensuring that users have the best online casino games and betting markets. Additionally, users can access the latest information on all matters of crypto regulation, including updates on taxation.