The UK’s Gambling Commission says it has warned Bitcoin operators that gambling offerings to UK clients require a license, even if conducted through bitcoin.
In a notice titled, “Why has the Gambling Commission written to Bitcoin operators?”, it expresses concern over illegal gambling operators providing services in the country. It points out that “an operator needs to be licensed by the Gambling Commission regardless of where they are located in the world, if they provide facilities for gambling to consumers in Great Britain.”
The notice goes on to say that it wrote to a number of unlicensed website operators which had been offering “prizes of money or money’s worth to gamblers.” On bitcoin, the Commission states:
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“Bitcoin comes under the category of money’s worth and therefore any operator offering this facility to gamblers in Britain requires an operating licence or they are acting illegally.”
The statement is consistent with a ruling from Her Majesty’s Revenue & Customs (HMRC) that also considers bitcoin like money in exempting its purchase from VAT. Even for income tax purposes, profits realized by individuals may not be taxable as capital gains, thus implying bitcoin is more like currency and less like property.
In other jurisdictions, government agencies may differ in their definitions of bitcoin, depending on their area of concern. In the US, for example, bitcoin is considered to be an equivalent of money when it comes to money services licensing requirements, but is considered like property for tax purposes, subjecting it to capital gains.