Home » Australia Cuts Off Crypto and Credit Cards for Online Gambling

Australia Cuts Off Crypto and Credit Cards for Online Gambling

In a significant move to curb financial risks associated with online betting, the Australian government has officially banned the use of cryptocurrencies and credit cards on digital gambling platforms.

This measure, effective from June 11, was reported by The Canberra Times and extends to credit sources linked to digital wallets, such as Bitcoin and other emerging forms of credit.

New Regulations Align with Land-Based Casinos, Exclude Online Lotteries

The newly imposed regulations are designed to align with the existing rules for land-based casinos, though they maintain exceptions for certain transactions like online lottery payments. The decision comes amid concerns over the easy access to excessive credit and the potential for substantial financial losses among gamblers.

The government has set a stringent penalty for non-compliance, with fines reaching up to 234,750 Australian dollars (approximately $155,000). This policy implementation follows a six-month transition period granted to the gambling industry to adjust to the new laws, now strictly enforced by the country’s communications watchdog.

Australia cracks down on online gambling with crypto

Kai Cantwell, CEO of Responsible Wagering Australia, an independent body representing Australian-licensed gambling service providers, supports the government’s initiative. Cantwell emphasized the importance of such measures in helping individuals maintain control over their gambling habits.

He has also called for these restrictions to be expanded to include all forms of gambling to prevent gamblers from seeking out less-regulated and potentially more harmful betting environments.

The intersection of cryptocurrency and gambling has been notable, not just in conventional betting arenas but also in speculative activities on prediction markets.

For instance, on January 11, Polymarket users placed bets totaling $12 million on whether the U.S. Securities and Exchange Commission (SEC) would approve a spot Bitcoin exchange-traded fund (ETF) by mid-January.

These bets, wagered on the Polygon-based decentralized predictions market, highlighted the speculative nature of crypto-users who engage in betting on regulatory outcomes and other high-stakes decisions.

Crypto and Gambling: A Speculative Intersection

The betting frenzy in crypto reached its peak just as the SEC was preparing to announce its decision on ETF’s. By January 10, trading volumes on Polymarket surpassed those on OpenSea, a leading nonfungible token marketplace, with $5.7 million compared to $3.9 million.

The bets were resolved in favor of those who speculated a “YES” as the SEC approved the trading and listing of 11 spot Bitcoin ETFs on the following day.

Despite the official verdict, some participants disputed the outcome based on semantic differences in the SEC’s terminology, arguing the bet should continue since the SEC referred to “exchange-traded products” rather than specifically naming them ETFs.

Beyond Bitcoin, crypto users also ventured bets on the potential approval of spot Ether ETFs in the United States. With over $2.4 million at stake, around 81% of the bets were pessimistic regarding the approval of a spot Ether ETF before the May deadline.

The bets, which also took place on Polymarket, were settled when the ETF was officially sanctioned on May 23.

These gambling activities reflect the broader trend of crypto enthusiasts engaging in both consequential financial forecasts and lighter, more whimsical predictions, such as guessing the frequency of Elon Musk’s social media posts or the extent of temperature increases.

Gambling
Bets on how many times billionaire Elon Musk will post

This pattern of behavior underscores the volatile nature of cryptocurrency use in gambling—ranging from serious financial gambits to trivial wagers—and the necessity for stringent regulations like those Australia has implemented.

The government’s proactive stance is aimed not only at protecting consumers but also at preventing the potential for financial disaster spurred by unchecked online gambling.