Crypto vs. Traditional Gambling: What’s the Difference?

With the rise of the internet, and especially the proliferation of broadband internet access from the early 2000s onwards, the popularity of gambling has exploded globally. Indeed, the evolution of online gambling has radically transformed how people play games of chance and skill. What was once only available in bricks-and-mortar casinos and arcades, is now accessible from virtually anywhere.

More recently, another revolution has begun to transform the online gambling space – the dawning of the cryptocurrency age. The adoption of blockchain technology has resulted in the rapid growth of crypto casinos, which offer a compelling alternative to traditional online gambling platforms. Cryptos like Bitcoin, Ethereum, Litecoin and dozens of other altcoins are now popular payment methods, appreciated by gamblers for providing greeted privacy, fast transactions, and truly global accessibility.

In this original CoinBets.com guide, we’ll look at how crypto gambling compares to traditional online gambling. We’ll delve into the mechanics of both, consider the advantages and disadvantages of each, and speculate about what the future holds. Hopefully, the information will help you pick the best online gambling options for your individual needs.

How We Got Here: Traditional Online Gambling

To start with, let’s consider traditional online gambling platforms. The first true online casino, “The Gaming Club,” was launched way back in 1994 by Microgaming – an Isle of Man-based company that has since grown into an industry giant. So, online gambling platforms have been evolving for three decades – quite some time! Today, there are hundreds of online casino brands – some with millions of customers.

These traditional online casinos and sportsbooks rely on an extensive infrastructure that includes platform, game, and payment providers. They use conventional payment methods such as credit and debit cards, digital wallets like PayPal and Skrill, and bank transfers for deposits and withdrawals. This system requires players to create an account, verify their identities with official documents, and use one of the conventional payment methods (usually in a closed-loop system – i.e. using the same method for depositing and withdrawing).

While slots and sports betting are the two most popular offerings at traditional online gambling sites, table games, poker, and live dealer games, bingo, instant wins, lottery, and virtual sports are also commonly offered. Although there are hundreds of small online casino and sportsbook brands, the space is dominated by huge corporate operators like Entain Group, Flutter Entertainment, Evoke, and Betsson Group – each with many gambling brands in their portfolios.These large brands have built reputations for offering fair, regulated, high-quality gambling experiences. Indeed, many of these, like William Hill ( Evoke), Paddy Power (Flutter Entertainment), and Ladbrokes (Entain Group) had already established their reputations long before online gambling existed – for example, William Hill was founded as far back as 1934.

Benefits of Traditional Online Gambling

The traditional online gambling space is increasingly regulated, with more and more countries and states establishing regulatory bodies. Authorities such as the UK Gambling Commission (UKGC), Malta Gaming Authority (MGA), Curacao Gaming Control Board (CGCB), and Swedish Gambling Authority (SGA) have created complex legal frameworks in the name of protecting players. Specifically, regulators tend to focus on fair play, responsible gambling, and combating money laundering.

Indeed, it is trust, both in individual well-established brands and in regulatory bodies, that has long been the biggest selling point for many traditional gambling sites. Familiar brands that operate within established regulatory frameworks that offer high degrees of consumer protection have been able to attract and retain customers even in the face of stiff competition from unlicensed offshore operators – even when those unlicensed operators offer bigger bonuses and more games.

Traditional online gambling platforms offer a wide variety of games – again, including many familiar and well-established types. And, at licensed casinos, players know that all the games have been independently tested and certified for fairness and quality. Additionally, these gambling platforms have responsive customer support services, usually available via live chat, email, and sometimes phone. At licensed sites in larger jurisdictions, like the UK, this support is often provided by teams based domestically rather than abroad.

Risks of Traditional Online Gambling

Despite the benefits, traditional online gambling also comes with several drawbacks. Perhaps the most significant of these is slow transactions – especially withdrawals. This is usually due to the speed of traditional banking processes and delays caused by regulatory requirements like ID verification and source of funds checks. Illustrating this point, it’s not unusual for a withdrawal via bank transfer to take more than a week at a traditional online casino.

Furthermore, in some jurisdictions, licensed casino and sportsbook operators are prohibited from accepting certain payment methods. For example, in 2020 the UKGC banned licensees from accepting credit card payments – with Australian authorities following suit in 2024. Adding to the complexity, even if a site does support a certain payment method, individual banks and card issuers often block gambling transactions. Exemplifying this, some UKGC-licensed sites now state that Mastercard debit cards can only be used for depositing due to new card issuer rules.

And, even when payment methods are accepted, fees can sting both players and site operators. For example, where they are accepted, credit card transactions can incur fees (especially if a currency exchange is involved) that significantly affect the final depositor withdrawal amounts. Some traditional operators also add fees for using particular e-wallets, or even for just processing any withdrawal request.

Another major drawback for players using traditional online gambling sites is geographical restrictions. This is the result of a confusing patchwork of different national and local regulations. Some countries prohibit online gambling entirely, others only allow sites licensed by their own regulatory body, and some jurisdictions only allow specifically certified or approved games to be offered.

Overview of Crypto Gambling

Superficially, online crypto gambling operates similarly to traditional online gambling – with many crypto casinos offering the same games and looking very similar. However, there are some key differences, mostly relating to how funds are deposited, wagered, and withdrawn. Instead of using fiat currencies like the US dollar, euro, or British pound, crypto casinos and sportsbooks accept cryptocurrencies like Bitcoin, Ethereum, Bitcoin Cash, Litecoin, Tether, BNB, XRP, and other altcoins. The different cryptos have their own individual qualities, but all are based on blockchain technology – a decentralized ledger system that ensures transparency, security, and the immutability of transactions.

Crypto casinos and sportsbooks range from what are essentially centralized (operated by a specific entity, like a company) traditional sites that now support crypto payments, to entirely decentralized peer-to-peer platforms. Examples of the former are BC.Game, Stake.com, and BitStarz – all of which are essentially traditional platforms, run by an operating company, that have integrated crypto payments and other blockchain-based elements. Truly decentralized peer-to-peer gambling platforms include social betting platforms like KUTT, and Web3 sportsbook Dexsport.

Additionally, an increasing number of crypto gambling sites are now embracing the potential of smart contracts – self-executing contracts based on blockchains like Ethereum, Solana, and Cardano. The more decentralized platforms are using this technology to allow true decentralized betting – relying on the smart contracts to manage and verify individual bets, and automatically execute payouts – without any need for human intervention.
But even centralized/hybrid crypto casinos are harnessing the power of smart contracts through provably fair gaming. This system uses cryptographic algorithms to allow players to verify the fairness of each game outcome, removing the need to trust either the casino operator or game developer. If you’d like to learn more about provably fair gaming, be sure to check out the CoinBets.com Introduction to Provably Fair Gaming.

Benefits of Crypto Gambling

One of the most appealing benefits of crypto gambling is enhanced privacy for users. Of course, the level of privacy depends on several things, including the specific gambling platform and cryptocurrency you’re using. But, on the whole, since crypto transactions don’t require the same level of personal information as traditional payment methods, they allow you to gamble with more anonymity. Additionally, by not sharing personal financial details, you’re reducing the risk of identity theft and fraud.

Cryptocurrency transactions are also normally faster than those involving fiat currencies. Again, it depends on the specific crypto in question, but transactions using lightweight altcoins like Litecoin, Bitcoin Cash, or Tether, are usually processed virtually instantly. Even Ethereum and Bitcoin, which tend to be the slowest cryptos, are much faster than something like a bank transfer. Plus, transaction fees are normally extremely low or even non-existent for both the player and site operator. This is especially significant for gambling operators, who at traditional sites often absorb significant transaction fees on behalf of their customers. And, if gambling operators can cut operations costs, they can afford to offer better bonuses to players – as evidenced by the generous wager-free promotional offers at crypto casinos like Gamdom.

A further advantage of crypto gambling is its sheer accessibility. By accepting deposits and making payouts in cryptocurrencies, casinos and sportsbooks can’t be held hostage by regulatory authorities or governments. Anyone who has internet access and a crypto wallet can access them and successfully deposit and withdraw. Indeed, this is an example of censorship resistance – one of the most attractive aspects of cryptocurrency and decentralization in general.

Risks of Crypto Gambling

But (there’s always a “but”), the very fact that crypto gambling sites can operate outside of the reach of regulators can be a double-edged sword. Because crypto casinos often operate from jurisdictions with either no regulation or extremely light regulation, players can find themselves with little or no protection in the event of a dispute or fraud. For example, the crypto casino Lucky Block was previously licensed in Curacao, but due to that jurisdiction tightening compliance requirements, it relocated to Comoros and is now licensed in Anjouan – a jurisdiction that offers virtually no player protection. Good luck trying to complain to the authorities in Mutsamudu if you need to recover lost funds. “Where the heck is Mutsamudu?” you ask – exactly!

The price volatility of cryptocurrencies is also an inherent risk when engaging in crypto gambling of any sort. The value of digital currencies is prone to dramatic and extremely rapid fluctuations, meaning your funds can lose significant value between the time of deposit and withdrawal. Of course, they can also go up in value during the same time – but, it does make managing a gambling bankroll tricky. If you’d like some tips on how to mitigate these risks, check out the CoinBets.com article Cryptocurrency Fluctuations and Gambling: Strategies to Mitigate Risk.

Finally, because of its ability to offer anonymous or pseudo-anonymous transactions, the crypto space still attracts some scammers and crooks. And, unfortunately, the gambling industry has seen its fair share of rogue operators willing to take advantage of unsuspecting players. As we’ve said many times, if something sounds too good to be true, it usually is. In fact, we’ve written a whole guide to Common Scams in Crypto Gambling and How to Avoid Them – check it out, it could save you a lot of stress.

When to Choose Traditional vs. Crypto

Here at CoinBets.com, we love crypto casinos and sportsbooks, but whether it’s the best choice for you will depend on your personal priorities.

If your security, regulation, and customer support are your main concerns, then it might be better to opt for one of the traditional platforms. The environment will be more familiar to those used to offline betting, and you’ll have the reassurance of a clear dispute resolution process should anything go wrong. Likewise, if you don’t feel comfortable using cryptocurrency wallets and exchanges, then you’re going to be better off staying well and truly in the fiat realm and using a traditional platform.

On the other hand, crypto casino or sportsbook site will suit those who prioritize privacy, speed, and global accessibility – especially those who already familiar with using cryptocurrencies. And, if you’re living in a country with repressive gambling regulations, a crypto platform may be the only reliable way to access online casino gaming and sports betting.

Future Trends

As already mentioned, most of today’s “crypto casinos” are actually hybrid crypto-fiat sites. They are operated by centralized companies, but support crypto payments alongside fiat options, and have integrated other blockchain-based elements like provably fair games.

So far, this hybrid approach has only really been possible for operators licensed in more lenient jurisdictions like Curacao. But, as crypto becomes more mainstream, we expect even the strictest regulators like the UKCG will eventually ease up and allow crypto payments. This will likely result in many of the biggest online gambling brands adding crypto payment options – however, they will still be required to fully comply with KYC (Know Your Customer) and AML (Anti-Money Laundering) rules.

Provably fair games, on the other hand, will probably become common even at licensed casinos that can’t accept crypto payments. There’s no real reason why the technology can’t be integrated into licensed casinos, assuming the game providers get the titles appropriately certified. The real stumbling block for this is that most people currently using traditional online casinos aren’t familiar with the crypto space or decentralization, so there’s little demand. But, as the general population becomes more familiar with blockchain and smart contracts, this will change.

Here’s the “but” again; regulatory authorities around the world are still struggling with the concept of cryptocurrency and decentralization. While some jurisdictions have accepted that crypto is here to stay and are trying to provide clear legal frameworks, others are still a mess. In some countries and regions, we are likely to see progressive policies that make crypto adoption easier, however, we are just as likely to see regressive policies in other areas. A prime example is in the United States, where crypto has turned into something of a political football.

Additionally, the relentless progress in the fields of artificial intelligence (AI), virtual reality (VR), and augmented reality (AR) will certainly play a role in shaping the future of both traditional and crypto gambling platforms. They offer the promise of more personalized, immersive, and interactive gambling experiences. And, given the typical profiles of crypto gambling site operators and their player bases, we think it’s a safe bet that crypto casinos and sportsbooks will be at the forefront of developments.