- September 16, 2016
- Posted by: Admin
- Category: Bitcoin News
After a lengthy consultation with both industry stakeholders and current licensees, the UK Gambling Commission, commonly referred to as the UKGC, has just recently released an updated version of its License Conditions and Codes of Practice, or LCCP. In this revised version of the LCCP, the UKGC has expanded its list of acceptable payment methods to include bitcoin and other cryptocurrencies. The new regulations are expected to go into effect on October 31, 2016.
A Brief Explanation of Digital Currency
Digital forms of currency, also called “cryptocurrencies,” are essentially highly secure bits of code that have been given monetary value. Though the general population may only be familiar with bitcoin, there are actually hundreds of forms of digital currency available. Though cryptocurrencies are legal in a majority of countries, the regulation and taxation of digital currency is handled differently than traditional currency.
The allure of digital currency is twofold. First, it is believed by some to be safer than dealing in fiat currency because the money is decentralized and independent of any banking institution. Second, the ability to transact anonymously over the Internet is very appealing to certain groups of people.
Gambling with digital currency has gained considerable popularity in recent years as well. It offers players several advantages over traditional currency, including few or no transaction fees, faster access to funds and a quicker, simpler registration process for bitcoin gambling sites.
The Newly Revised Language of the LCCP
The updated portion of the LCCP, Section 5.1, is the part that addresses “cash and cash equivalents, payment methods and services.” The updated version now includes the following guidelines for licensees:
“Licensees, as part of their internal controls and financial accounting systems, must
implement appropriate policies and procedures concerning the usage of cash and cash
equivalents (eg bankers drafts, cheques and debit cards and digital currencies) by customers, designed to minimise the risk of crimes such as money laundering, to avoid the giving of illicit credit to customers and to provide assurance that gambling activities are being conducted in a manner which promotes the licensing objectives.”
Why the UKGC’s Updated LCCP is Important
As stated above, one of the main reasons for this clause is the intention to lower the risk of money laundering while also attempting to keep the UK’s gambling practices controlled and above board. The new portion of the LCCP allows the UK to expand its net of control and player protection a bit wider, as well.
The UKGC oversees not only land-based gambling, but also all aspects of online gambling for the entire UK. Therefore, this organization is incredibly high-profile, which means that many other governing bodies in the online gambling industry take their cue from the UKGC.
Until now, there has been an extremely low level of acceptance for digital currencies like bitcoin, dogecoin, ethereum and litecoin, all of which are now covered under this release of the LCCP. In fact, as it stands right now, Curacao is the only jurisdiction that has allowed its licensees to accept bitcoin as a legitimate method of payment.
Acceptance of cryptocurrencies by the UKGC will more than likely open the floodgates for other regulatory bodies in the online gambling industry to either modify their own existing regulations or, at the very least, allow for a discussion of the role of digital currencies in online casinos. Currently, both the Isle of Man Gambling Supervision Commission and the Malta Gaming Authority are discussing this topic as well.
As of now, bitcoin casino operators that want to open up their sites to citizens of the UK will still have to go through the proper licensing channels.