Crypto casinos are reportedly pulling in tens of billions of dollars every year. According to new data, many gamblers are dodging restrictions in their own countries and placing bets on unregulated offshore sites instead.
The Financial Times reports that even though crypto gambling is illegal in most places, bets made with digital currencies brought in $81.4 billion in gross gaming revenue last year. That’s the amount left after paying out winnings, and it’s five times more than what was made in 2022, based on research from online crime watchdog Yield Sec.
Even though crypto gambling sites are officially blocked in places like the US, China, the EU, and the UK, people are still getting around those restrictions. All it takes is a VPN, a mirror link, or a bit of URL redirection, and they’re in.
Hundreds of ‘ready-to-gamble' crypto casino accounts are being openly sold on Facebook and other mainstream social media sites – I found most sellers were flogging @Stake's profiles. It shows, once again, how simple it is to get around the safety barriers. https://t.co/heyckYAMCH
— sanya burgess (@sanyaburgess) January 31, 2024
Some of these crypto casinos are based in places where this kind of gambling is legal, like Curaçao, Malta, the Isle of Man, and Gibraltar. Big names like Stake, Rollbit, and Roobet operate out of these jurisdictions, and they’ve grown so fast they’re now competing with the biggest players in the traditional gambling world.
Stake is run by a Curacao-based company called Medium Rare, and they claim their platform handles up to 4% of all Bitcoin transactions worldwide. Since launching in 2017, they’ve reportedly attracted around 25 million users who’ve placed over 300 billion bets. Last year, Stake is said to have brought in $4.7 billion in gross gaming revenue, an 80% jump from the year before.
Major traditional gambling giants like Entain and Flutter brought in $6.6 billion and $14 billion in total revenue last year, respectively. Bet365 pulled in $4.9 billion for the year ending March 2024. However, those companies don’t break out gross gaming revenue numbers like Stake does.
‘Age-old tactics’ used by crypto casinos
According to a written testimony supplied to a UK Parliamentary Select Committee, Yield Sec CEO Ismail Vali said that there was a “misconception” that allowed illegal operators to “thrive around legal video gaming, social media and digital currency platforms, exploiting products like loot crates, mystery boxes, and predictor games.”
He continued: “These ‘platform parasites’ offer services that often appear as ‘workarounds’ within the legal platform, be it video gaming or cryptocurrency investing. However, the reality is that they utilize age-old gambling mechanics adapted to the nuances of mass audience platforms.”
The Financial Times also notes that Stake doesn’t see itself as a “crypto casino.” The company says more than half of the transactions on its platform are made using traditional currencies, not crypto.
Stake is also the main shirt sponsor for Everton Football Club, but it recently shut down its non-crypto UK platform. The platform, run through Isle of Man-based TGP Europe, was pulled after the UK Gambling Commission launched an investigation into a promo video that featured an adult performer.
Consumers are being advised that 'stake. uk. com' will no longer be a licensed website from next month.
To read more about this, visit our website 💻 https://t.co/zjmYVdBo9X pic.twitter.com/LxP2qJRUpD
— Gambling Commission (@GamRegGB) February 12, 2025
Illegal gambling is ‘bleeding the US’
The latest analysis comes as Yield Sec also dropped new data about the US market. It found that illegal online gambling operators now control a massive 74% of the $90.1 billion US online gambling space.
The report, commissioned by the Campaign for Fairer Gambling, was part of Yield Sec’s “USA National 2024” findings. While legal online gambling in the US grew by 36% last year, illegal gambling revenues shot up by 64%, nearly double the pace.
The report also shows just how widespread illegal gambling content is in the country, as 88% of online audiences are being exposed to it, from search engines, social media, streaming platforms, and apps.
Even though more states are rolling out legal online sports betting and casino options, the illegal sites are still dominating as they’re often cheaper, offer a wider range of games, and pull people in with aggressive promotions that legal operators just can’t match.
Derek Webb, founder of the Campaign for Fairer Gambling, stated: “US legalization of internet gambling without a gameplan to tackle the illegal sector has been an unmitigated disaster.
“In California, where online gambling is illegal, the total population loss per capita for 2024 is $141. In comparison with New Jersey, where online sports and casino gambling are legal, the illegal loss per capita on sports is $103 and on casino is $169, being a total of $272, nearly twice as much as in California.”
Vali added: “Let’s not pin this on gambling regulators alone. Their job is to supervise the licensed industry, not to chase criminals who never applied for a license. Illegal gambling is everyone’s problem – operators, law enforcement, media companies, social platforms, and governments all have a role to play.”
ReadWrite has reached out Stake for comment.
Featured image: Canva
