Check their license. Many crypto gambling sites are not licensed to operate – particularly in certain states in the US. Check any restricted countries. Always check whether your crypto gambling site operates in your country and complete KYC early to avoid withdrawal issues. Many users set up accounts without KYC on a given crypto gambling site just to find out later on that they can’t withdraw their crypto as they’re based in a restricted country – according to the platform. You can find out more in our cost basis guide. Nowadays, crypto gambling is a big business, with the global crypto gambling industry predicted to hit more than $90 billion by 2024. There are thousands of Bitcoin casinos to pick from, as well as other crypto casinos that accept popular altcoins like ETH, XRP, DOGE, and more. It is however undeniably a hit to the industry. All you need to do is hit download and add it to your tax return.
Indeed, many of these lists fail to mention the many risks of crypto gambling and may have been financially incentivized to add certain sites to the list. Many popular Twitch streamers were sponsored to play and effectively promote a variety of crypto gambling sites throughout 2022. While Twitch generally allows gambling streams, many of these crypto gambling streams failed to disclose sponsorship, age restrict to an appropriate audience, and even encouraged practices like using VPNs to access sites that were not operational in the US. We offer a huge variety of tax reports from around the world, ready to hand over to your tax office – for example the IRS Form 8949 and Schedule D, the ATO myTax report and a HMRC Capital Gains Summary. No tax office has issued guidance on crypto gambling winnings just yet. There is however extensive guidance on gambling winnings in general and it all comes down to where you live. There is no clear guidance on betting crypto and how it would be taxed. There is no specific legislation on a federal level around crypto gambling. No, Twitch hasn’t banned crypto gambling – context is everything. Did Twitch ban crypto gambling? However, there is extensive state legislation around online gambling in general.
There are even a couple of Vegas casinos – like the D in Las Vegas – that accept Bitcoin too. In the same way you can head to the casino in your city and spend those hard-earned dollars, you can head to a Bitcoin casino online and gamble your crypto there. Just recently, rapper Drake won $1.2 million of Bitcoin on his Super Bowl LVII bet on the Kansas City Chiefs. Once you’ve done this, Koinly will calculate your capital gains, losses, income and expenses across all the platforms you use. Whatever your crypto investments – whether it’s gambling or trading – the tax man will want a cut. You can see this in your tax summary – all on our free plan. But Koinly can save you hours of maths and spreadsheets. If you can’t get a recommendation from someone you know and trust, looking for recommendations on Reddit or checking reviews on Trustpilot can help you spot crypto gambling sites with less-than-stellar reputations.
You can report to your national police authority, but due to the borderless nature of crypto transactions, there’s often very little these authorities can do other than file a report and there’s no guarantee you’ll get your crypto winnings or your original deposit of crypto back. UK: Gambling winnings are tax free. Arguably, it could be seen as spending your crypto on goods or services – which is subject to Capital Gains Tax. US: Gambling winnings are subject to both Federal and State Income Tax. Canada: Gambling winnings are tax free. When you sell your crypto winnings, you’ll pay Capital Gains Tax on any capital gain. However, you likely won’t want to keep your gambling winnings in crypto – so what happens when you sell your crypto winnings for fiat currency? Selling your winnings for fiat currency. But be warned, the market is rife with scams, from dodgy crypto gambling sites that won’t let you withdraw your winnings to phishing scams to get you to share sensitive information – investors need to be extremely cautious in this market. These sites may be forced to withdraw services or freeze funds quickly. But as you may get nothing in return, it’s a grey area.