Bitcoin Online Casinos: Current Status And Legal Alternatives

Bitcoin online casinos have experienced a surge in popularity, driven by heightened anonymity, global accessibility, and lightning-fast transactions. These features make them attractive to a growing audience, especially with crypto-friendly marketing aimed at younger users.

However, U.S. players should be cautious, as Bitcoin casinos likely violate federal gambling laws and do not offer the same safeguards as regulated online casinos.

This guide will not lead you toward unregulated Bitcoin casinos but rather explain why they are probably illegal. We’ll also explore potential paths toward regulation and provide legal alternatives, such as sweepstakes casinos that accept Bitcoin and other cryptocurrencies.

What are Bitcoin casinos?

Bitcoin casinos are online casinos that accept Bitcoin (BTC) as a primary mode of transactions. Some Bitcoin casinos also accept other cryptocurrencies like Ethereum (ETH) and Litecoin (LTC), and others act as hybrid casinos, accepting both crypto and cash deposits.

Once a deposit is made, a player’s balance will usually be displayed in their local fiat currency. This figure will be variable, due to fluctuations in crypto pricing. However, the amount of crypto in your wallet will only vary per casino wins and losses.

Otherwise, Bitcoin casinos offer a similar game selection as traditional online casinos, covering slots, table games, video poker, and Live Casino tables.

They are popular because they provide a sense of heightened anonymity. Financial transactions are processed through blockchain technology, ensuring transparency and shielding players who’d rather hide their gambling activities from creditors and banking institutions.

Some Bitcoin Casinos go so far as to provide complete anonymity, only requiring an email address during the sign-up process. This complete lack of Know-Your-Customer (KYC) checks undoubtedly has its appeal, allowing customers to create accounts and initiate deposits in a flash, but the downsides are crippling.

Without KYC, Bitcoin Casinos have fewer tools to protect players against identity theft and fraud, and it opens the door to nefarious activities like money laundering and underage gambling. Casinos are also less equipped to monitor customer behavior, meaning reckless gambling will go unchecked.

Many BTC Casinos are adopting KYC, but shoddy licensing and a general lack of crypto regulations have created a sort of Wild West environment, where the quality and security of Bitcoin Casinos varies widely from app to app.

Bitcoin online casinos and the UIGEA

The Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA) had a significant impact on Bitcoin online casinos by effectively shutting down unregulated casinos in the U.S. without outright banning gambling sites. Instead, it prohibited payments from U.S. soil.

The UIGEA set forth a list of banned payments, including ACH (eCheck), cards, checks, wire transfers, and money transmitting businesses. However, virtual currencies like Bitcoin are not explicitly mentioned. This comes as little surprise, considering Bitcoin wasn’t created until three years after the bill’s passage.

Lawmakers have not amended the UIGEA to include crypto in its definitions of payments, but this isn’t to imply that Bitcoin online casinos are legal. It’s more that they exist in a murky legal area, and that prosecution would be difficult to enforce.

Compounding matters further is that it’s virtually impossible to trace the physical origin of Bitcoin transactions.

Also, the UIGEA doesn’t criminalize players for depositing funds on unregulated online casino apps. In some states like Washington, online gambling is a crime, but even then, the law is rarely enforced.

Unregulated Bitcoin Casinos are usually set up in jurisdictions with relaxed gambling laws like Curacao, thus adding yet another layer of protection from U.S. law enforcement.

States that have legalized online gambling bypass the UIGEA, and are free to accept payments from approved systems. So far, seven states offer regulated online casinos – New Jersey, Pennsylvania, Michigan, West Virginia, Delaware, Connecticut, and Rhode Island – but legal casinos only offer traditional payment methods.

In short, if you’re gambling at a Bitcoin Casino from the U.S. the site you’re playing at is unregulated, and there’s no guarantee that it will adhere to principles of integrity and security.

Will legal US online casinos add Bitcoin?

Legal U.S. online casinos that deal exclusively in crypto are probably a ways off. However, Bitcoin may appear as a supplemental cashiering option on existing casino apps sooner rather than later.

The ball is already rolling.

In 2021, Wyoming passed an online sports betting law (House Bill 133) that allows sportsbooks to accept “digital, crypto, and virtual currencies,” pending they can be converted to cash.

Regulations in other states permit governing bodies to authorize new payment methods that extend beyond credit/debit cards and eChecks. This caveat was tested in July 2022, when Barstool Sportsbook (now ESPN Bet) began accepting crypto deposits via a third-party processor in the Colorado and Virginia markets. Crypto withdrawals are not permitted.

However, online casinos are not legal in any of these states.

If regulators choose to permit Bitcoin transactions, they’ll be posed with several difficult challenges. Chief among them is how to regulate an unregulated currency, and still have it appeal to customers. Additional KYC checks will likely be necessary to comply with state law, which is at odds with the anonymity enjoyed by Bitcoin users. Furthermore, regulators must further tighten their stringent Anti-Money Laundering (AML) laws.

Suffice it to say, it’ll be a process, leading most regulators to sit on the sidelines until there’s either a Federal-level framework governing Bitcoin or states plug in the gaps left by governmental agencies. Yet, that could be coming soon enough.

Legal gambling sites have many payment alternatives

On a side note, legal gambling sites offer many payment alternatives, and one could argue that they don’t need Bitcoin payments. Or at least not as much as unregulated operators.

Over the years, regulated gambling sites have gained widespread acceptance from payment processors and now offer far more cashiering options, with much quicker withdrawals and few if any transaction fees. Turnarounds for several payout methods are near instantaneous, offsetting one of the key advantages of crypto withdrawals.

Credit card deposits are still a crapshoot, but the widespread availability of PayPal, Venmo, Apple Pay, prepaid cards, and cash options dramatically soften the blow. ACH (eChecks) deposits and withdrawals are also available, and players hesitant to provide their info directly to the online casino can link their bank accounts via secure first- and third-party portals.

Sweepstakes casinos that allow Bitcoin transactions

Sweepstakes sites and online casinos are fundamentally similar but classified differently under U.S. gambling law. The main distinction is that sweepstakes players can win prizes without making real money purchases, allowing these platforms to operate legally in most states.

Instead of using real money, players purchase Gold Coins (GC), which have no inherent monetary value, and receive free Sweeps Coins (SC) as part of the package. SCs can also be earned by claiming daily bonuses, participating in free promotions, or writing request letters to the operator.

Some sweepstakes sites, like Stake.US, Luckybird.io, and Sweepslots, have adopted crypto models alongside fiat currency options. These platforms allow players to redeem their SCs for gift cards or monetary prizes. Here’s a quick rundown of the most prominent ones.

Stake.US

Stake.US is the sweepstakes equivalent of Stake.com, one of the largest crypto casinos in the world. Since launching in August 2022, the site has grown dramatically, now spanning over 800 slots from various top-flight providers, 18 exclusives, and 14 Live Casino games.

It’s also stocked with several recurrent promotions, a strong daily bonus, and a cashier that accepts 20 different cryptocurrencies, including Bitcoin.

New players receive 25 Stake Cash and 250,000 Gold Coins, with the only caveat being that the bonus has to be claimed daily for 25 days. From that point forward, players can claim 1 SC + 10,000 GCs every 24 hours. The daily bonus is essentially a perpetual continuation of the welcome package.

Stake.US offers a robust promotional schedule, consisting of daily races, weekly raffles, leaderboard promos, challenges, and multiplier drops. It also features a multi-tiered and rewarding loyalty program that players can climb via SC and GC play.

The main downside is that Stake Cash must be turned over 3x before players can withdraw. This is significantly higher than the 1x rollover that has become the industry standard. Additionally, redemptions are subject to transaction fees, of up to 5 SC depending on the method.

Bitcoin fees are roughly 2.50 SC, but players who redeem via Litecoin or Bitcoin Cash only incur 0.01 SC fees. The minimum withdrawal amount hovers between 40 – 50 SC, which is considered low relative to industry norms.

Luckybird.io

LuckyBird.io has adopted many attributes that have made Stake.US a roaring success, from its interface to its game selection and crypto-only cashier.

The game lobby features over 400 slots, including over a dozen originals. However, the table game selection is thin, and the site has yet to launch a Live Casino. At present, there’s just one simplistic blackjack game, a roulette table, craps, and about 10 miscellaneous (albeit popular) games like Plinko, Crash, Tower, and Mines.

New players receive a modest bonus, 5 SC + 50,000 on their first $10+ purchase, pending they complete the site’s KYC checks. They can also earn several small SC rewards by completing onboarding tasks like verifying their email, sending chat messages, and setting up 2FA. A 0.20 SC daily reward rounds out the freebies, but that can only be claimed once players fully verify their accounts.

Regular players can climb the site’s 15 VIP ranks, and refreshingly, achieving the first few tiers isn’t that difficult.

Deposits can be made with cryptocurrencies including Bitcoin, Ethereum, and Litecoin. However, players will incur small fees when initiating payouts.

Sweepslots

Sweepslots is a relative newcomer that holds promise but needs some fleshing out.

Players receive an attractive registration bonus consisting of 5 SC and 10,000 GC. They’ll also get a hefty 60% discount on their first deposit, with two options available:

• 20 SC and 300,000 GC for $10
• 40 SC and 600,000 GC for $20 (recommended)

This is in addition to a weekly bonus that gives players an extra 50% GCs & SCs. There’s also a modest 0.25 SC daily bonus alongside a Lucky Spin Wheel that resets every 5 hours. Typically, the wheel only awards 500 – 5,000 GC, but occasionally you’ll score a SC bonus.

Sweepslots has an attractive VIP program in the works, that will award players with weekly discount packages, reload bonuses, birthday rewards, and rakeback. It’s one of the few programs we’ve seen where players don’t have to earn a higher rank to start receiving the more eye-popping rewards.

The site houses roughly 280 slots, a handful of oddly named table games, and some niche titles, but no Live Dealer. The promotional menu is lacking, and the best (and only) way to earn free coins is to follow the site on social media.

Sweepslots is a true hybrid Sweeps Casino that accepts credit/debit deposits, Skrill, and various cryptos, including Bitcoin.

How to deposit Bitcoin on sweepstakes sites

Once you’ve taken the necessary steps to purchase Bitcoin, depositing it onto sweepstakes sites is a relatively simplistic process.

Get a Bitcoin storage wallet and load it

It’s highly recommended not to use a crypto exchange like Coinbase for gambling-related deposits, as the exchange may eventually ban your account.

Instead, use a hot wallet (software) or a cold wallet (hardware) storage system. Bluewallet is an excellent free choice for beginners, but feel free to conduct a Google search for a wallet that fits your preferences.

Next load the wallet with your preferred funds. You can use an exchange or other means to send Bitcoin or another crypto to your unique address. The trade should process within seconds.

Navigate to the “buy” section of a sweepstakes casino

Log in to a sweepstakes site (register first if you haven’t already), and click “Buy” or an equivalent. You may need to complete the site’s KYC requirements before initiating a deposit.

This will open up a menu showcasing the available packages. Search for packages within your budgetary limits that offer the best ratio of free SCs to dollars spent. New players may get a one-time deal worth 50% – 200% in padded value. For instance, Sweepslots’ welcome package awards 40 SC + 600,000 GC for $19.99, a 100% bonus.

Returning players can snag weekly discounts or receive special offers based on their play. Check your email and the site’s social media outlets frequently for deals.

Make a deposit

Once you’ve selected a package, you’ll proceed to the deposit menu. From there, select the cryptocurrency you want to make a deposit with from a dropdown menu.

Bitcoin is usually listed by default, but most Bitcoin sweepstakes sites offer several other options, including ETH, DOGE, LTC, BCH, and USDT.

 The operator will provide an address that must be copied exactly, as crypto transactions cannot be reversed. If you enter the wrong address, you’re out of luck. Use the clipboard option to avoid mistakes.

From there, pop over to your Bitcoin wallet and send the funds to that address. Some, but not all, sweeps operators will allow you to purchase Bitcoin from their internal cashier, in case your funds run low.

Start playing

Bitcoin transactions usually process lightning-fast. Within seconds, the deposit will be approved and you’ll be off to the slots, digital tables, and Live Casino.

Your balance will be displayed in SCs, not in Bitcoin. Just be aware that Bitcoin is highly volatile, so the per SC value of deposits may not match the dollar value of your withdrawals.

Bitcoin casino new player bonuses

If and when legal Bitcoin online casinos open their doors, we expect to see many of the same new player bonuses you see on existing gambling apps. For new players, this will include deposit match bonuses, bonusback offers, Bet & Gets, and free spins.

Some sites may even offer lucrative no-deposit bonuses, awarded upon completing the registration process.

For now, legal Bitcoin sweepstakes sites offer a variety of discounted deals and free entries. Welcome packages include:

• Registration bonuses: Some sweepstakes sites offer bonuses to players who complete the sign-up process. Additional awards may be earned for tasks like opting into SMS, chatting, or verifying your identity. On the higher end, players earn up to 10 SC and a good chunk of GCs via these rewards.
• Heightened daily bonuses: Sweeps may frontload their daily bonuses, offering larger rewards to new players. However, it’s usually the other way around, with sites incrementally scaling their daily bonuses, capping out after 14-30 days.
• First deposit bonuses: The best way to pad your starting bankroll is through generous welcome bonuses. To take advantage of these, players will have to initiate a deposit. They’ll then receive a percentage bonus on that transaction. The value of this bonus varies widely, from 5 SC up to 100+ SC. It depends on the site.

Bitcoin cashiering alternatives at legal US online casinos

One of the biggest appeals of legal online casinos is their flexible and robust payment options. Players have several alternatives to depositing directly with Bitcoin, including PayPal, Venmo, ACH, and various cash options. These methods provide secure and fast ways to process transactions, often just as quickly as Bitcoin deposits.

PayPal

PayPal was initially hesitant to allow gambling transactions but has softened its stance toward legal U.S. online casinos. Today, it’s tough to find a gambling app that doesn’t allow it for deposits and withdrawals.

PayPal transactions are conducted over a secure portal, so you’ll never have to provide your banking info directly to the casino. Each payment is guarded by high-level encryption, ensuring that your funds and identity are safeguarded.

Furthermore, players can use their personal PayPal accounts to buy, sell, and hold various cryptocurrencies, including Bitcoin. Combine this with a gambling app’s ability to process PayPal deposits instantly, and you have a strong alternative to direct Bitcoin payments.

Venmo

Venmo is another popular eWallet that happens to be owned by PayPal. It was originally designed for peer-to-peer transfers but has expanded to include legal online casino payments.

Not all gambling apps have added Venmo to their cashiers, but major brands like BetMGM, FanDuel, and DraftKings offer it for deposits and withdrawals. More will inevitably follow. The eWallet is becoming known as one of the fastest cashiering methods, with instant deposits and payout requests usually honored within 12-24 hours.

Venmo users can purchase BTC, ETH, LTC, BCH, and PayPal USD directly from the app, and then can sell their crypto for online casino deposits. It’s not a perfect solution to direct Bitcoin deposits, but as close as we’ve witnessed.

ACH

Bitcoin is viewed by many as a rejection of traditional banks, so why do we consider ACH (Check) transactions a viable alternative?

There are a few reasons, but the primary one is that services like VIP Preferred allow legal online casino players to initiate ACH transactions from a secure portal independent of the casino site. In other words, the casino cannot digitally access your banking information, offering you a degree of financial anonymity.

Secondly, ACH transactions are speedy. Deposits process within a few seconds and some online casinos enable instant withdrawals from trusted customers. For instance, BetRivers uses RushPay, which bypasses the “pending” period on ACH withdrawal requests.

Cash options

Players can fully shield their financial information from online casinos by depositing with cash.

Some states, like New Jersey, have enabled a “cash at the casino cage” option, where players travel to an app’s affiliated partner casino, and hand cash directly to a teller. Within 15 minutes, their online casino balance will be updated. Cash at the cage is also available as a withdrawal method.

However, it’s not always convenient to truck down to a casino, and some players would rather avoid the allure of land-based casino games. For them, PayNearMe is another solid cash payment alternative. Players generate a special code from the gambling app and bring it to their local 7-Eleven or CVS. The payment is made in person with cash and reflected in player balances almost immediately.

The downsides are low deposit limits and the inability to withdraw via the same method.

Pros and cons of prospective Bitcoin casinos

Despite their reliance on traditional currencies, legal online casinos already cover many key advantages of Bitcoin Casinos. Other Bitcoin Casino benefits wouldn’t be as impactful in a regulated environment.

Regardless, Bitcoin’s utility is undeniable, and gambling apps would be wise to implement crypto payments.

Pros

• Anonyminity: The biggest draw of Bitcoin online casinos is that you never have to provide operators with your personal information. Sometimes you won’t even have to provide your personal details. However, the latter won’t fly on legal online casinos, as regulations mandate strict KYC checks.
• Options: Most Bitcoin casinos also accept other cryptos. Therefore, you could have far more payment options versus traditional online casinos.
• Higher limits: Many banks and eWallets impose strict withdrawal limits on customers, whereas Bitcoin Casinos tend to permit massive withdrawals. However, this will only impact a select few, as most legal online casinos can easily handle withdrawals in the $50,000 range.
• Speedy transactions: There’s no doubt that Bitcoin transactions are quick and transparent. Deposits process within a few seconds and withdrawals are usually instantaneous. Yet, legal online casinos process most deposits just as quickly. Withdrawals may still take 1-2 business days, but turnaround times are quickening each year. Universal instant payouts via eWallets, ACH, and prepaid cards are well within reach.
• No transaction fees: Due to the lack of an intermediary, Bitcoin deposits are extremely cheap, and customers rarely have to pay processing fees. Legal online casino deposits and withdrawals are also 100% free, but the transaction fees may fall upon the player by other means, like worse promotions and smaller loyalty kickbacks.

Cons

• Complicated: Not everyone is familiar with how cryptocurrencies work and they can be a little intimidating to new users. Also, Bitcoin casino deposits typically involve an extra step or two than other cashiering methods.
• Gamble on your gamble: With the exception of stablecoins, crypto prices are extremely volatile. Players already gambling with their hard-earned money may be skeptical about using a currency that could fluctuate widely. There’s only so much gambling that most people can handle.
• Security vulnerabilities: The blockchain is a provably fair technology, but without strict KYC and AML regulations governing Bitcoin casinos, they’re leaving themselves exposed to hackers and money laundering. Unregulated casinos make up their own rules, leaving players to guess about their legitimacy, whereas legal online casinos must adhere to the same stringent guidelines.