Gambling, Revisited
18 October 2026
Crypto exchanges are reassessing support for gambling-linked tokens amid a surge in on-chain betting. Rising deposit numbers, token circulations, and trading traffic are attracting regulators' attention.
Exchanges abandoned crypto gambling in 2018 after a market-wide crypto-derivatives purge. High withdrawals and trading losses damaged public perception. But now, on-chain gambling activity is rebounding, putting pressure on major platforms that cannot afford to ignore its legitimate demand and volume.
TRM Labs reported on-chain gaming volume rising 9% to USD 15 billion in Q4 2025, before stabilizing at USD 14 billion in Q1 2026. Tanzanite put last year's on-chain casino deposit volume at USD 48.8 billion - a 73% increase from 2024. And CoinGecko shows a USD 8.05 billion combined market cap in gambling tokens, up 33% over twelve months.
What Know As Gambling-Tokens
Fourth-quarter 2025 funds attracted by platforms include WINk and Rollbit, which TRM Labs says collectively processed over USD 14 billion in quarterly gaming volume. The labelling comes with an important legal qualifier: Polymarket and Kalshi, two prediction markets, are generating millions in new trading activity daily, even as other markets struggle. "Regulators," says Coinlib, "are unsure whether or not to apply the 'gambling' tag to these products."
But classifications are complicated by evolving products. FunToken (FUN), a leading gambling coin, supports on-chain casino games, decentralized sportsbooks, no-loss lotteries, and a prediction market. Polymarket, the largest gambling-linked platform on Polygon, has avoided casino products - so far.
The 2026 IFHA report "Unregulated and unstoppable: Cryptocurrencies" defines GambleFi as "the combination of blockchain technology and cryptocurrency with gambling" for greater transparency and payout rewards. IFHA goes on to describe some gambling coins as tokens that provide rewards or profit access privileges - the basis of asset value.
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Localised Tightening
Major crypto exchanges have resisted gambling tokens due to user demand and regulatory risk. Warnings from a 2026 CFTC proposed-rules document remain vague on event contracts involving casino gambling.
Smaller platforms have quietly traded gambling-adjacent tokens, but the appeal remains limited. Binance earns a revenue share from some casinos like Slots.io, but only a few exchanges actively trade betting tokens. Bybit announced a sportsbook token collaboration, but it remains a private launch in Indonesia.
The New York attorney general has implemented regulations targeting Coinbase and Gemini, suing on grounds that prediction-market products constitute illegal gambling. Stocks fell sharply after the attorney general declared 18-to 20-year-olds could place bets on those platforms.
Predictably, representatives from both companies reject the accusations, stating they follow applicable laws. In a move toward stricter compliance, Coinbase has implemented identity verification procedures. Meanwhile, Polymarket has recorded a record-breaking USD 70 million daily trading volume, with approximately half concentrated in crypto bets, demonstrating strong demand for prediction markets.
