The use of cryptocurrencies in gaming : the legal and regulatory considerations

Abstract

The recent development of Bitcoin, a cryptocurrency, has led to various debates with respect to legal matters concerning gambling with Bitcoins. It has become imperative for regulators to explore the potential gaming law issues, which the usage of this digital currency is leading to, given that such technological developments have grown rapidly in recent years. This study therefore seeks to address and identify the Bitcoin system‟s possible legal impact on the Online Gaming industry. In order to achieve the objectives of this study, both primary and secondary researches were performed. A couple of in-depth interviews with legal practitioners and stakeholders were carried out to collect primary data. The first Chapter provides a brief overview of what cryptocurrencies are, with a particular focus on Bitcoin. Chapter 2 aims to establish the position of cryptocurrencies in the regulatory sphere and whether they classify as legal tender. The research question also seeks to inquire the predicted possibility of cash being replaced by cryptocurrencies in Chapter 3, and its impact on the gaming industry. Chapter 4 then delves into analysing the potential legal risks associated with the use of cryptocurrencies in gaming and whether the current European laws and Maltese gaming regulations embrace this use, finding that they do not. The shortcomings of the Maltese legislation relating to cryptocurrencies in the field of gaming are inquired in the last Chapter, whereby suggestions for a regulatory scheme comprising cryptocurrencies are also offered. In this respect, it shall be noted that since the online gaming industry as well as the technology behind cryptocurrencies are constantly evolving, more important legal developments might have taken place after the submission date of this research project. Consequently, this study covers the issues attributed to cryptocurrencies and their use in the gaming industry as at April 2016.