Crypto and Gambling in NZ – Why Operators are Rushing to Add Crypto to Their Banking Options
While the global crypto market may have endured a challenging 2022 that was marked by steady decline, it appears as though this fascinating and volatile entity may be embarking on an upward trend once again.
To this end, the crypto sector’s total market cap value has recently increased incrementally to $982 billion, as it looks to inch higher and once again achieve its previous peak of just under $3 trillion.
Crypto is also a market that’s characterised by almost limitless future potential, while it has already impacted a diverse array of industries including the similarly high-growth iGaming marketplace.
NZ online casinos have certainly moved to embrace cryptocurrency as a viable payment method. But is this legal, and why are crypto assets like Bitcoin (BTC) becoming increasingly popular among iGaming operators?
Are Crypto and Online Gambling Legal in New Zealand?
Let’s start with the basics; as it’s important to note that both crypto usage and online gambling are technically legal practices in NZ.
In the case of crypto tokens (including first-generation assets like BTC), such entities aren’t formally regulated or prohibited in New Zealand.
The reason for this is simple; as crypto tokens aren’t classed as legal tender and not available in any kind of corporeal form, which in turn means that they’re not viewed as financial products from a technical perspective.
A similar classification applies to online gambling in New Zealand. More specifically, while the practice hasn’t been formally legalised or regulated in NZ, there are no specific laws that make online gambling illegal.
This creates a type of legislative loophole, which means that players can wager freely in New Zealand without having to be preoccupied about breaking the law.
Because of these legal considerations, licensed operators have also been able to integrate BTC and similar crypto tokens into their available range of payment options, alongside more established fiat options and ewallets.
Why are Casinos Integrating BTC and Similar Crypto Tokens?
The question that remains, of course, is why have NZ casinos and remote betting sites been so quick to integrate BTC and similar tokens into their platforms?
At the heart of this trend is the growing popularity of BTC in the consumer mainstream, and some of the unique benefits that it offers in comparison with fiat currencies.
Many of these advantages are also particularly relevant in the world of online gambling, so we’ve outlined a few of the most important below:
#1. Cryptocurrencies are Decentralised
Perhaps the major pro of cryptocurrency is that tokens are almost exclusively decentralised.
This means that they’re not governed by a third-party entity or monopoly, creating far greater transparency in terms of record keeping and negating any risk of market or token manipulation.
This also helps crypto assets to remain as stable as possible, which is crucial given their innate volatility and inability to serve as a secure or tangible store of wealth.
Due to their decentralised nature and the ledger technology (blockchain) that underpins them, cryptocurrencies are also free from government control and have historically served as a viable hedge against inflation (although this trend appears to have been bucked through 2022).
#2. Cryptocurrencies are Secure and Private
When you complete regular financial transactions online, security is always a significant concern.
In the case on iGaming deposits and withdrawals, you may have a desire to keep these transactions private too, and the good news is that crypto casinos can help in both of these regards.
Certainly, the entire premise of crypto currencies is built on cryptography, with the blockchain ledger utilising mathematical puzzles that miners must decode when unlocking tokens and validating transactions. Similarly, so-called “private keys” utilise unique cryptographic hashes to help secure transactions to and from wallets, making it incredibly difficult for cyberthieves to steal your digital funds.
In this respect, the underlying security of crypto platforms can further build on existing 128-bit SSL encrypted casino sites, creating a safe and secure gambling experience that provides genuine peace of mind. In terms of privacy, individual transactions are recorded in blocks and contain no personal information at all. In fact, blocks will only include the relevant crypto wallet addresses, ensuring that your name, identity and email address remains completely private.
#3 It’s a Cost-Effective Mode of Transaction
Finally, the decentralised nature of crypto means that there’s no third-party control, eliminating any brokers or middlemen that typically apply charges when processing transactions.
This makes crypto assets like BTC a cost-effective mode of transaction, and one that enables you to retain as much of your winnings as possible when completing iGaming withdrawals to your wallet.
Additionally, crypto also has a reputation for processing quick and seamless iGaming transactions.
Sure, there are occasional bottlenecks when processing transactions through popular platforms such as BTC and Ethereum, but it’s far more common for payments to be verified and approved in a matter of moments.