Why Gibraltar’s crypto gambling regulation is important and what to expect from it?
Gibraltar is one of the world’s biggest gambling hubs. The industry enjoys very low taxes and some of the biggest names in the industry have their success roots in this Mediterranean U.K overseas territory. Gibraltar opened its doors to iGaming in 1998 and ever since the gambling industry has enjoyed tremendous growth here.
The regulation of the gambling industry in Gibraltar has over the years been managed by the Gibraltar Gambling Commission (GGC) while the interests of the casinos have been represented by the Gibraltar Betting and Gambling Association. With the success of the cryptocurrency market in the recent past, the country has embraced the blockchain technology and has become the first amongst many to try and integrate crypto and gambling. This has led to several existing gambling regulations being adjusted while many more being introduced.
The crypto gambling regulation in Gibraltar
At the beginning of 2018 when many countries were tightening regulations around ICOs and cryptocurrency, Gibraltar was taking a different route. The country was openly welcoming Bitcoin and other digital currencies. However, the country was embracing the crypto but under certain terms which meant that the government had substantial control over what happens in the crypto market in the country.
The regulations introduced by the government of Gibraltar insist on companies storing and also transmitting value that is to be licensed by the Financial Services Commission (GFSC). The first regulation was the Digital Ledger Technology (DLT) Regulatory Framework. The regulation was designed to create acceptance of crypto in the country. The DLT Framework is supposed to lay down the groundwork for further cryptocurrency legislation in a country that holds online gambling as one of the key pillars of its economy.
All the crypto casino licensees will have to follow the principles laid out by the government in order to protect consumer rights and interests. Every DLT provider will be required to communicate with its customers in a way which is fair, clear and not misleading. The communication from the provider should further have proper regard for the risks involved both for the customers and itself. Companies must have effective arrangements made for the protection of clients’ assets and money. This should also include contingency disaster recovery and crisis management plans.
According to Nicky Gomez, head of GFSC’s Risk and Innovation Department, the commission is looking forward to working on some interesting and innovative ideas with the applicants of licenses. Gomez further noted that GFSC became the first regulator to introduce a DLT Regulatory Framework in conjunction with the financial services industry and the Gibraltarian government (follow this link to get more information).
The importance of the regulations to the gambling industry
There seems to be no other better place to explore cryptocurrency regulation models other than Gibraltar. The legal system of the country is vehemently independent of the United Kingdom and it has proven that gambling can thrive and be regulated under the right conditions. Given the country’s long history of being a gambling haven and the popularity of crypto with gamblers, it is easy to see why the government was the first to take a step toward this direction. Moreover, the country’s tax incentives and lax regulations help at encouraging blockchain technology growth and innovation.
What does this mean for gamblers?
For starters, Gibraltar is a territory of the U.K and has one of the most forgiving systems, at least as far as gambling goes. This automatically makes it a safe haven for crypto investors and gamblers from around the world. That means that a lot of funds are available in crypto-casinos and gamblers get to enjoy better payouts. The government is introducing additional regulations which are meant to make Bitcoin, crypto wallets and crypto ATMs much safer and transparent.
But there is still some ground to cover. According to Andrew Layman, an executive director at Gibraltar’s gambling regulatory body, crypto firms which seek to offer services to gambling operators don’t seem to understand the rigor of licensing. Even though he is willing to listen to the crypto firms’ proposals, no adverse concessions should be expected, he warned. He added that the firms are having difficulty articulating how they would do anti-money laundering (AML) and counter-terrorism financing (CTF). Layman was speaking earlier in May 2018 at KPMG Gibraltar eSummit. He, however, said that he could envision a peer-to-peer usage of cryptocurrency or even exchange betting.