The UK Gambling Commission (UKGC) has given online licensees the green light for digital currencies such as Bitcoin to be accepted payment methods.
Following a series of consultations with licensees and industry stakeholders, the UKGC released its updated License Conditions and Codes or Practice (LCCP); regulations which are set to take effect on October 31st 2016.
In the LCCP, Section 5.1 addresses “cash and cash equivalents, payment methods and services.” Licensees are told that they are to “implement appropriate policies and procedures concerning the usage of cash and cash equivalents by customers.” These cash and cash equivalents include bankers, drafts, cheques and debit cards, as well as digital currencies.
The intention behind this is to reduce the risk of money laundering activity and to “provide assurance that gambling activities are being conducted in a manner which promotes licensing objectives.”
Licensees were advised that they need to take into account any applicable learning or guidelines issued by the UKGC from time to time.
Quoting CEO Sarah Harrison, the UKGC’s annual report last month said that digital currencies were among the regulator’s areas of “continuing future focus”, but Harrison gave no specifics on what that might entail.
The acceptance of Bitcoin by UKGC, a high-profile body, could help to stimulate public acceptance of alternative currencies. The only jurisdiction to date that has allowed online gambling licensees free reign to accept the Bitcoin as payment is that of Curacao.
Momentum seems to be increasing, however, as in May, Isle of Man Gambling Supervision Commission proposed allowance of its online licensees to accept deposits made in “convertible virtual currencies.” The Malta Gaming Authority also reportedly held a meeting recently on this very subject.
A year ago, the UKGC wrote to emphasise that any Bitcoin gambling operators wishing to serve the UK market will still require a UK license. It also hinted at its upcoming policy adjustments by saying that the form of currency is “almost irrelevant”, as long as licensed operators could demonstrate that “crime is kept out of gambling and consumers are protected.”