UK Gambling Regulator Considers Crypto Payments as FCA’s New Crypto Framework Takes Shape
London, 5 April 2024 – The UK Gambling Commission (GC) has signalled its intention to probe the use of crypto‑assets as a payment method for licensed online gambling venues. The move comes as the Financial Conduct Authority (FCA) prepares to roll out a comprehensive regulatory regime for cryptocurrency activities, with full implementation slated for October 2027.
What the GC is doing
At the Betting and Gaming Council’s annual general meeting, Tim Miller, the GC’s executive director for research and policy, outlined the regulator’s interest in establishing a “path forward” that would allow crypto‑assets to be accepted by authorised gambling operators. Miller stressed that the enquiry is driven by two factors: a growing demand from gamblers to use digital currencies and an increasing incidence of crypto‑related searches that lead users to unlicensed, illegal gambling sites.
To flesh out the possibilities, the GC has tasked the Industry Forum – an advisory body representing gambling‑sector stakeholders – with mapping the practical and regulatory options for crypto payments. No firm deadline has been set for the Forum’s report, but the commission expects its findings to inform future policy decisions.
Consumer protection angle
The GC’s rationale hinges on safeguarding UK players. Data from the commission’s illegal‑markets research indicates that crypto terms rank among the top search queries that steer bettors toward rogue operators. By bringing crypto payments under the umbrella of licensed gambling, the regulator hopes to close a loophole that currently enables illicit platforms to attract users seeking anonymity or the perceived ease of digital‑currency transactions.
Nevertheless, Miller cautioned that allowing crypto payments does not automatically extend the full suite of gambling‑regulation safeguards to the underlying operators. Issues such as customer suitability assessments, responsible‑gaming checks and anti‑money‑laundering (AML) controls would still require robust processes, and the Commission remains wary of any gaps.
FCA’s parallel crypto licensing programme
The Gambling Commission’s initiative dovetails with the FCA’s broader push to bring crypto‑asset service providers (CASPs) under a unified regulatory framework. In January, the FCA released a final consultation outlining ten proposals covering everything from stablecoins to crypto‑exchange licensing. The consultation is expected to close in March, after which the FCA will publish its definitive rules.
Key dates in the FCA’s timetable are:
| Milestone | Expected Timing |
|---|---|
| Consultation closes | March 2024 |
| Publication of final rules | Mid‑2024 |
| Opening of the application window for full authorisation | September 2026 |
| Commencement of the new regime | 25 October 2027 |
CASPs that miss the September 2026 application window will be subject to transitional arrangements, allowing existing products to continue but restricting the launch of new crypto offerings.
How crypto payments could work in regulated gambling
Should the GC endorse crypto as a payment option, licensed operators would likely need to integrate compliant wallet solutions or partner with FCA‑authorised CASPs. These providers would be responsible for carrying out AML checks, know‑your‑customer (KYC) verification and transaction monitoring in line with the new FCA standards. The GC anticipates that this layered approach would combine the consumer‑protection strengths of the gambling licence with the rigorous financial oversight required for crypto‑transactions.
Industry reaction
Early feedback from the gambling sector has been cautiously optimistic. Operators recognise the commercial appeal of offering a broader suite of payment methods, especially for younger demographics that favour digital assets. At the same time, some firms have raised concerns about the operational burden of complying with two separate regulatory regimes (gambling and financial services) and the potential for increased compliance costs.
Cryptocurrency exchanges and wallet providers see an opportunity to expand their user base by tapping into the £10‑plus‑billion UK gambling market. However, they also acknowledge that the forthcoming FCA authorisation process will demand substantial investment in compliance infrastructure.
Analysis
The GC’s exploration of crypto payments represents a pragmatic response to market realities. By aligning gambling‑payment options with the FCA’s forthcoming crypto framework, the UK aims to:
- Reduce illicit gambling traffic – Integrating crypto payments into the regulated sphere could divert users away from illegal sites that currently exploit the anonymity of digital currencies.
- Enhance consumer safeguards – FCA‑authorised CASPs will be subject to robust AML/KYC standards, providing an extra layer of protection for gamblers.
- Future‑proof the sector – As digital‑currency usage grows, early regulatory clarity can prevent a fragmented market and encourage responsible innovation.
However, the dual‑regulation model could introduce complexities. Operators will need to navigate both gambling‑licence obligations (e.g., suitability checks, responsible‑gaming measures) and FCA financial‑services requirements (e.g., capital adequacy, reporting). The success of the initiative will hinge on clear guidance from both regulators and seamless cooperation between gambling operators and crypto service providers.
Key takeaways
- The Gambling Commission is actively studying crypto payments for licensed online casinos, tasking its Industry Forum with outlining viable implementation routes.
- Consumer protection is a central driver, with crypto searches identified as a major conduit to illegal gambling sites.
- FCA’s new crypto‑licensing regime will be operational by October 2027, with an application window opening in September 2026.
- Licensed operators will likely need to partner with FCA‑authorised crypto service providers to meet AML/KYC standards.
- The dual‑regulatory environment may raise compliance costs, but could also curb illicit activity and broaden payment options for UK gamblers.
As the FCA finalises its rules and the GC’s industry mapping progresses, stakeholders will be watching closely to see how the UK navigates the intersection of digital‑currency finance and regulated gambling. The outcome could set a precedent for other jurisdictions seeking to harmonise crypto innovation with consumer‑protection frameworks.
Source: https://cointelegraph.com/news/uk-gambling-watchdog-allow-crypto-payments-fca-framework?utm_source=rss_feed&utm_medium=feed&utm_campaign=rss_partner_inbound
