As the line between finance and gambling continues to blur in the digital age, crypto casinos have emerged as a growing force in the iGaming world. In the United States, where gambling laws are notoriously fragmented and regulatory interpretations change rapidly, the rise of crypto-based betting platforms has triggered intense debate across legal, political and operational domains.
This article explores whether crypto casinos fall under existing US gambling laws, how recent legislative changes like the GENIUS Act impact operations, and what the future may look like for crypto betting platforms across the American market.
What is a Crypto Casino and How Does It Work?
A crypto casino is an online gambling platform that accepts cryptocurrency for deposits, wagers and withdrawals. Most commonly, these platforms accept stablecoins such as USDT (Tether), USDC (USD Coin) or BUSD, as well as more volatile tokens like Bitcoin and Ethereum. Some casinos are built entirely around crypto and decentralised wallets, while others serve as hybrid platforms accepting both fiat and crypto payments.
Players can typically sign up, fund their wallet with a supported token, and begin gambling without the same level of identity verification required by fiat-based operators. This frictionless onboarding is part of the appeal but it is also one of the regulatory red flags for lawmakers concerned with anti-money laundering (AML), underage access and financial crime.
Is Cryptocurrency Recognised as Money in the United States?
One of the foundational legal questions is whether cryptocurrencies are classified as money or something else entirely. This classification determines whether crypto casinos should be regulated in the same way as traditional online casinos and sportsbooks.
In the United States, cryptocurrency is not recognised as legal tender. Instead:
- The Internal Revenue Service (IRS) treats crypto as property, meaning it is subject to capital gains tax when traded or sold.
- The Commodities Futures Trading Commission (CFTC) considers it a commodity, placing it under a different regulatory lens than securities or currency.
- The Financial Crimes Enforcement Network (FinCEN) treats crypto platforms that handle funds on behalf of others as money service businesses, triggering AML and KYC obligations.
So while crypto can function like money in practice, it is not regulated as currency under US law. This distinction is central to understanding the grey area in which crypto casinos currently operate.
Gambling Laws in the US: A Patchwork of Rules
Gambling in the United States is regulated on both the federal and state levels. However, the federal government does not provide licences for online gambling. Instead, it is left to each state to determine the legality of gambling activities within its borders.
Key federal laws that affect gambling include:
- The Unlawful Internet Gambling Enforcement Act (UIGEA) – Prohibits gambling operators from knowingly accepting payments in connection with unlawful online gambling. The law is payment-focused and broadly written, which means any form of payment used to fund bets crypto included can fall under scrutiny.
- The Wire Act – Originally written to target sports betting across state lines, the interpretation of this law has fluctuated over time. In 2011, the Department of Justice stated it only applied to sports wagering. However, in 2018, this was reversed, creating uncertainty for all forms of online gambling.
- The Illegal Gambling Business Act – Can be invoked against operators who earn more than $2,000 in revenue per day from illegal gambling, depending on state law.
At the state level, jurisdictions like New Jersey, Michigan and Pennsylvania have embraced legal, regulated online gambling. Others, like Utah, prohibit all forms of gambling. This creates a legal minefield for crypto casinos, especially those operating offshore and attracting US-based players.
Crypto Casinos and Offshore Loopholes
Most crypto casinos that accept US players are not based in the United States. They operate from jurisdictions with more relaxed licensing regimes, such as Curaçao or parts of Eastern Europe. These platforms often accept bets in crypto, offer fast withdrawals, and allow anonymous accounts.
While technically outside the jurisdiction of US regulators, these platforms are still accessible to American users especially those using VPNs to spoof their location. The use of crypto allows these casinos to bypass traditional banking rails, which are more closely monitored and restricted under US gambling law.
However, this does not mean they are immune from prosecution. The US Department of Justice has, on multiple occasions, brought charges against offshore operators who have actively targeted American customers or facilitated payment processing in violation of UIGEA.
The GENIUS Act: A New Framework for Stablecoins
In July 2025, the GENIUS Act (Guiding and Establishing National Innovation for US Stablecoins) was signed into law. This landmark legislation provides a federal framework for the issuance and redemption of payment stablecoins, which are digital tokens pegged to the US dollar and backed by audited reserves.
While the GENIUS Act is not a gambling law, it has profound implications for crypto casinos particularly those that allow users to buy stablecoins with fiat and deposit them directly into the casino wallet.
If a casino facilitates the purchase of stablecoins (such as USDC or USDT) using credit cards, wire transfers or bank accounts, that activity now falls under the GENIUS Act’s scope. Operators involved in issuing or redeeming stablecoins must be licensed as Permitted Payment Stablecoin Issuers. They must also adhere to strict AML/KYC procedures, reserve requirements and regulatory reporting.
For crypto casinos offering their own on-ramp services where fiat is converted into stablecoin before being deposited into a gambling wallet this introduces a whole new layer of compliance and oversight.
Avoiding the On-Ramp: Can You Bypass the Law?
What happens if a player already owns stablecoin and simply deposits it into the casino from a personal wallet? Or if the player purchases tokens from a non-US exchange like Binance or OKX and transfers them to the gambling site?
In these scenarios, the GENIUS Act does not apply to the casino, because it is not issuing, redeeming or facilitating the purchase of stablecoins. The on-ramp occurs externally, outside the platform’s control. This gives crypto casinos a way to avoid being captured by the stablecoin regulations but only temporarily.
While this may offer some breathing room, it does not exempt the casino from broader gambling regulations. Accepting bets from US players in states where online gambling is illegal still constitutes a breach of UIGEA and potentially state criminal laws. Moreover, if withdrawals are processed through domestic banking systems, the operator could face exposure under anti-money laundering and financial crime statutes.
Lawmakers and Regulators Are Catching Up Fast
One of the major challenges in this space is that laws and enforcement priorities are changing all the time. Regulators are aware of the rapid growth of crypto casinos and the loopholes being exploited. As a result, we are seeing increased momentum at both the federal and state levels to close the gap.
Some states are already discussing amendments to their gambling codes to include digital assets. Others are ramping up enforcement of existing laws to target offshore operators with significant US traffic.
Meanwhile, federal agencies like FinCEN and the SEC are collaborating to define clearer standards for platforms that straddle the line between financial services and gambling. The GENIUS Act is a major step in this direction but it will not be the last.
The Future of Crypto Casinos in the United States
So what does the future look like?
In the short term, crypto casinos will likely continue to operate in legal grey areas, especially from offshore jurisdictions. However, the window is closing. As the US tightens its grip on stablecoin regulation and enhances coordination between federal and state gambling authorities, unregulated operators will face increasing pressure.
We expect to see a bifurcation in the market:
- Fully licensed hybrid operators that embrace regulatory compliance, secure state-level gambling licences and work with regulated stablecoin issuers.
- High-risk offshore platforms that cater to grey and black markets but may be subject to criminal or civil enforcement if they continue to target US players.
Operators looking to build a long-term, scalable business in the US market will need to invest heavily in licensing, compliance, KYC infrastructure and financial auditing.
Meanwhile, players will become more discerning. As awareness grows around the risks of playing on unlicensed platforms lack of withdrawal guarantees, susceptibility to hacks, legal implications many will opt for regulated environments with better safeguards.
Final Thoughts from Digital Fuel
Crypto casinos are undeniably a powerful evolution in the iGaming landscape. They combine the efficiency and speed of decentralised finance with the global appeal of online gambling. However, in the United States, they operate in one of the most complex and fast-changing regulatory environments in the world.
The recent introduction of the GENIUS Act is only the beginning. Lawmakers are evolving quickly, and what is legal today could be prohibited tomorrow. For operators and investors, this means the margin for error is getting thinner.
At Digital Fuel, we believe the winners in this space will be those who anticipate change, invest in regulatory strategy and balance innovation with responsibility. Whether you are a platform operator, a technology provider or a brand looking to enter the crypto gambling space, now is the time to seek expert guidance, protect your assets and stay ahead of the regulatory curve.
If you're exploring how to navigate this new frontier, get in touch with our team at DigitalFuel.io. Our deep expertise in iGaming, gambling legislation and digital asset strategy can help you build with confidence.