Is Online Gambling With Cryptocurrency Illegal In India?

Several crypto casinos have become popular in 2023, but gamblers prefer digital casinos because they are decentralized and provide anonymity to the players. This is why players from the restricted regions play using Bitcoin or Altcoins. The Online gambling market using cryptocurrency is already $37.9 billion and is expected to grow further.

Well, talking about the legalization of online gambling in Indian states, online bookies are allowed, but they should be licensed. Only Goa, Daman, and Sikkim states allow the land-based casinos. Online gambling still works as a shady area, as many gamblers, especially beginners, fall prey to illegal casinos.

Moreover, the Union Budget for 2022 and 2023 recognizes cryptocurrency as the Virtual Digital Asset. The crypto owners will be levied a 30% tax on the income they will be earning through crypto trading or gambling.

Famous casinos such as BET365, 22BET, Bitcasino.io, 7Bit Casino, and Lucky Days are a few casinos that offer cryptocurrency betting. You can play slot games, live dealer games, sports betting, etc., by betting with cryptocurrencies. Most users opt for crypto casinos because of the anonymity, security, and encryption features they offer.

India is not treating cryptocurrency as illegal because the returns earned through cryptocurrency and gambling wins are taxable. A full-fledged taxation framework has been put forth to tax crypto gambling as the taxes work for speculative gambling and horse racing. Don’t be surprised by the flat 30% tax rate, as RBI warned against risks like price volatility, money laundering, and financing terrorists.

Moreover, the Reserve Bank of India (RBI) launched the digital virtual currency in 2022, which will be easy to manage and cheaper. However, gamblers still stick with Bitcoin and Ethereum gambling because they are easily available and possess a good exchange value. Indian crypto users will touch a mark of 156 million by the end of 2023. In 2018, RBI warned banks and financial institutions not to allow crypto trading or exchanges. But, in 2022, the Central Bank issued its light and cheaper digital assets. It shows that India will become the next crypto hub by 2023, but the taxation on cryptocurrency will remain the same.

One thing worth noting is that gamblers will only be taxed on the crypto winnings or the capital gains they have earned by selling cryptocurrencies. You must read expert casino reviews to understand the terms and conditions based on cryptocurrency use in your country/state/region.

People in India use mobile applications to buy Bitcoin and other cryptocurrencies. Most people who have bought cryptocurrency from unknown sources have incurred a loss of up to INR I Lac and more. A recent crypto scam of INR 2,800 crore was unearthed in which Chinese people were stated to be involved.

Apart from this, a few other scams related to cryptocurrency are under investigation. Like,

• A Delhi person duped people of INR 500 crore on the pretext of providing 200% as the return on the cryptocurrency. The suspect held meetings in lavish hotels, took people on vacations, and made them understand the Blockchain process. There were other false claims made that are still under investigation.

• Another scam is reported from Himachal Pradesh where the scammers duped people of almost INR 2,500 crore. The scammers send the top-tier people who invested more money on foreign trips to countries like Dubai, Thailand, etc. Almost 4k to 5k government employees and other 1 lac investors lost their money. Almost 70 to 80 imposters are stated to earn more than INR 2 crore.

• A 1,000-crore scam has already been busted in August 2023 by Odisha police. It was a STA Crypto token scam. The victims of this scam are from the states such as Delhi, MP, Haryana, Jharkhand, etc. The scammers asked victims to bring in more people, as they can earn $3,000 daily if they add more members.

• The CoinEgg scam also duped people of INR 1,000 crore by posing as a fake exchange where they used social media platforms to pursue people. The scammers used versatile Android apps and multiple payment gateways to lure innocent people. LinkedIn is also becoming the burning stage for scammers to lure people into investing in these crypto exchanges.

All these scams, and maybe much more operational on different levels, have made RBI and the Supreme Court take on joint efforts to regulate crypto gambling. The court of law issued the warnings and RBI systematically:

• In 2013, RBI stated that Bitcoin and other Virtual Currency holders should be vigilant about the financial and security risks that the crypto market is posing.

• Until 2017, the Central Bank had not issued any license to any firm to operate in cryptocurrencies. So, any person holding, trading, or investing in cryptocurrency will do that at their own risk.

• In 2018, money laundering issues and consumer protection problems were raised to legalize the crypto market. RBI also issued guidelines to the small and commercial banks, which are regulated entities, to stop any operations with the virtual currency-selling firms.

• However, 2020 and 2021 witnessed a different scenario regarding the regulations set aside by the Supreme Court of India and RBI. The prohibition of cryptocurrency was lifted, but the banks and other financial institutions have to abide by the laws set aside by the government.

In 2023, the Government of India, through a circulation notification issued on March 7, 2023, stated that the cryptocurrencies and other virtual assets used for gambling, trading, or any other purpose would fall under the PMLA (Prevention of Money Laundering Act). The exchange between two cryptocurrencies or the transfer of digital assets will fall under this Act.

Under PMLA, the crypto intermediaries, dealers, and crypto exchanges have to maintain the record of their clients and get the KYC done. Any suspicious activity will be reported to government agencies, and assets will be reported regularly.

Currently, the only legalization around cryptocurrency is to pay a 30% flat tax on gambling winnings or capital gains from buying and selling crypto assets. It means no one will take you to a court of law if you possess the cryptocurrency. RBI and the Supreme Court notifications also suggested that gamblers can gamble only at regulated casinos.

This has recently paved the way for the world’s top cryptocurrency exchange, Binance, to provide cryptocurrency in INR to Indians. The traders can now buy the crypto using the Indian rupee and pay through e-wallets or GPay. However, RBI has asked the UPI and banking platforms to examine the transactions that will occur closely.

With these regulations, it has become safe for gamblers to deposit and withdraw money via cryptocurrencies. Punters can use Bitcoin, Litecoin, Ethereum, etc., to gamble online at regulated and licensed casino sites. You can bet with any cryptocurrency you hold, as 20,000+ cryptos are already in circulation. The world may see an influx of more cryptocurrencies in the coming years. However, most reputed gambling sites allow Bitcoin, Litecoin, Ethereum, Dogecoin, etc.

The last few years have seen the potential rise of cryptocurrency, especially Bitcoin. Many people possess it as a virtual asset and want to buy it. However, limited knowledge may keep people away from the pros and cons of buying cryptocurrencies. To lower the stress levels and scams reigning the crypto world, the Investor Protection and Education Fund under the Ministry of Corporate Affairs has launched an awareness campaign for investors.

These awareness campaigns can help cryptocurrency users invest and gamble wisely. Supreme Court has restricted the RBI and other government bodies from banning the whole class of digital assets. The digital revolution and evolution in the crypto market are here to stay. The Global Crypto Adoption Index 2023 has also ranked India among 154 nations that are adopting and using cryptocurrencies in their daily life.

This figure shows more investors will invest in crypto gambling. An estimate of 20 million investors is provided. Crypto ownership has also doubled since 2022. Providing welcome bonuses, reload bonuses, weekly bonuses, and other crypto promotions encourages Indian gamblers to opt for cryptocurrencies to gamble.

We always advise punters to check out for crypto legalizations and regulations when gambling. A close watch on the pros and cons is mandatory to safeguard your hard-earned money. Read the online casino reviews and invest wisely in betting and casino gambling.