The rapid rise of cryptocurrencies has become the latest accelerator for the world’s sprawling illegal betting markets.
According to new research from the International Federation of Horseracing Authorities Council (IFHA), 43 percent of the most popular illegal betting websites now accept crypto deposits, up sharply from 25 percent in early 2024, while only 5 percent of legal operators do the same. The divergence underscores how digital assets are fueling an unregulated parallel gambling economy that regulators are struggling to contain.
The report attributes the surge to a potent mix of market momentum and political support. Since early 2024, the global crypto market has ballooned from $1.7 trillion to $4 trillion in capitalization, boosted by favorable regulatory signals and new exchange-traded funds in the United States. Former President Donald Trump’s pro-crypto stance and the legalization of stablecoins have further entrenched digital assets in the mainstream financial system.
As crypto’s legitimacy has grown, so has its use in online gambling, especially outside the law. The IFHA study found that crypto-funded wagers generated more than $80 billion in gross gaming revenue last year, a figure expected to more than double to $200 billion by 2030. Offshore hubs such as Curacao, Malta, Gibraltar, and the Isle of Man have become magnets for crypto betting sites, while VPN usage and influencer-driven marketing make it easy for consumers to bypass restrictions.
The numbers tell a clear story: crypto’s integration into gambling is expanding far faster in illegal markets than in regulated ones. Among the top 100 global betting sites studied, nearly half of those deemed illegal accepted digital currency, with one operator offering a staggering 24 different cryptocurrency options. By contrast, only two of the 42 legal operators accepted crypto payments at all.
Bitcoin remains the dominant choice for bettors, accepted by 88 percent of the illegal operators reviewed. Ethereum and Litecoin follow closely behind, with stablecoins like Tether and meme tokens such as Dogecoin also featuring prominently. But the report notes that two-thirds of the cryptocurrencies used on these sites are not designed for everyday transactions. Their volatility, lack of institutional backing, and limited liquidity make them unreliable as payment mechanisms – especially compared with fiat currencies.
Still, for illegal operators, crypto offers obvious advantages: speed, low fees, and, crucially, anonymity. That same anonymity also enables large-scale money laundering and other financial crimes. The report highlights how crypto’s pseudo-anonymous structure, decentralized systems, and privacy-enhancing tools – such as “mixers,” “privacy coins,” and cross-chain transfers – allow bad actors to move illicit funds through the betting ecosystem with relative ease. Chainalysis data cited in the study suggests that as much as $31.5 billion in cryptocurrency was laundered in 2022 alone.
Crypto’s appeal to illegal operators is also being amplified by aggressive promotions. Some sites offer 200 percent match bonuses for crypto deposits, hourly bitcoin jackpots, or lifetime referral earnings. These inducements are clearly designed to attract young, tech-savvy bettors who see crypto gambling as both entertainment and investment. The IFHA report warns that such offers exploit the very demographics most at risk of gambling harm while drawing them deeper into unregulated environments.
Legal betting operators, meanwhile, have mostly steered clear of crypto. The few that have experimented with it face complex compliance challenges, from anti-money laundering checks to customer verification. For regulators, cryptocurrencies have upended traditional control mechanisms: the flow of funds now moves outside banks, across borders, and often without any identifiable source or beneficiary. VPN use further obscures jurisdictional boundaries, making enforcement next to impossible.
The report stresses that gambling laws in most jurisdictions were written long before crypto existed, leaving vast grey zones. While some countries like Malta and Estonia permit limited crypto deposits that must be converted into fiat before betting, most do not address the issue at all. The result is a fragmented regulatory map where betting with crypto is neither explicitly legal nor clearly banned.
That regulatory vacuum, experts warn, risks creating a fully parallel gambling system operating entirely outside national oversight. Offshore operators, often licensed in jurisdictions with minimal scrutiny, are already exploiting these loopholes. Without coordinated international intervention, legal markets could lose increasing numbers of consumers to unregulated platforms that offer anonymity, bigger bonuses, and zero safeguards.
The IFHA report concludes that cryptocurrencies, in their current form, are a high-risk medium for gambling transactions. Only about a third of the coins in circulation function as true digital currencies, and even those fail to meet the basic test of monetary stability. Combined with crypto’s proven role in facilitating financial crime and the absence of effective consumer protection, the case for caution is clear.
Yet prohibition alone may not work. Crypto ownership is growing rapidly, and consumers accustomed to using it as an asset will inevitably expect to use it for gambling. The report suggests that a pragmatic approach – allowing crypto deposits but requiring immediate conversion into fiat currency, as done in Estonia and Malta – could offer a balance between consumer freedom and regulatory control.
The alternative would be for governments to embrace crypto further, realizing that it cannot be stopped and trying to use its benefits – such as on-chain traceability of transactions – to their advantage, a move that may ultimately be the best way forward.
