As you already may know, one of most interesting topics within the industry in the last couple of months is the MGA’s (Malta Gaming Authority) plan to move forward and allow the legal use of digital currencies such as bitcoin at online casinos in the near future. The fact is that bitcoin and other cryptocurrencies have played a major role in the last decade, however, many online casinos have operated out of unregulated or lightly regulated jurisdictions which naturally raise concerns that now need to be dealt with.
MGA evaluating the risks
Earlier this year, at the “iGaming Meets the Maltese Capital Markets” conference, organized by The Malta Stock Exchange, the MGA’s Executive Chairman, Joseph Cuschieri, gave a speech during which he, among other things, addressed the role of cryptocurrencies in online gambling. Though there are many advantages this type of currency brings, there are also multiple risks. Therefore, the MGA needs to carry out a thorough study to assess the risk factors, as this will further determine the form and shape of the framework which will govern the cryptocurrencies.
Cryptocurrencies are an emerging innovation and in order for online gambling to further evolve it needs keep pace with the new technologies. Having this in mind, it is safe to say that it is in the MGA best interest to find the way to regulate the use of cryptocurrencies in gambling.
MGA should embrace bitcoins and other cryptocurrencies for the purposes of competitive advantage.
Moreover, local Maltese authorities hope to become the leading country in the innovation department. Last April, Prime Minister Joseph Muscat said: “We must be on the frontline in embracing this crucial innovation, and we cannot just wait for others to take action and copy them. We must be the ones that others copy”. With this in mind, MGA should embrace bitcoins and other cryptocurrencies for the purposes of competitive advantage. The demand for a more widespread use of these technologies is certain, and there is no reason why online gambling shouldn’t be part of this new-age change. What’s more, it can introduce legal standards and regulations, which can perhaps be applicable to other industries later on.
Another important reason why MGA should even consider regulating bitcoins is the mere fact that prohibition never does any good. It only leads to underground activities and black market operations, which may, in the case of online gambling, substantially harm the players’ interests.
Embracing the change
It is extremely important for MGA to balance carefully the requirements of developing detailed programs for consumer protection and anti-money laundering with competitive pressures from other jurisdictions. For now, we will stay tuned and keep our eyes open for further developments regarding this issue.