A Cryptocurrency Casino for Caracas

In a recent press statement, Venezuela’s President Nicolas Maduro announced that a new gambling hall in Caracas will accept bets placed in cryptocurrency. This signifies the first time legal gambling has been allowed in Venezuela since 2011.

 close-up shot of a green table in a casino, with stacks of poker chips placed on numbered squares.

President Nicolas Maduro of Venezuela has lifted a nearly decade-long ban on gambling with the introduction of a new casino in the nation’s capital. ©Kay/Unsplash

A Hail Mary for Venezuela’s Cryptocurrency

As political turmoil rages on in Venezuela, the country’s economy has staggered under the weight of crushing economic sanctions. Massive inflation of the national currency, the bolivar, has followed: even after a devaluation of the bolivar in 2018 that successfully reduced 5 zeros from the currency’s inflation, the IMF calculated in 2019 that it would be possible for Venezuela’s inflation to reach a new high of 10 million percent.

As such, people in Venezuela are turning more and more to digital currencies like Bitcoin and Ethereum. Their interest in doing so says something: many people have been wary of using the cryptocurrencies for their unpredictable fluctuations. But for people in Venezuela, these currencies are more stable and reliable than the bolivar. For those from Venezuela who now live outside the country, sending money home in the form of cryptocurrencies is preferable.

Maduro’s Crypto: The Petro

During this time, Venezuela’s government, overseen by the controversial President Nicolas Maduro, introduced their own cryptocurrency, the Petro. According to Maduro and his administration, the Petro is funded by the nation’s oil: that each unit of Petro directly corresponds to a barrel of Venezuela’s crude oil, a fossil fuel reserve greater than any other country in the world.

Despite Maduro and his administration insisting on the value and utility of the Petro, critics have been consistently wary of the cryptocurrency. From the perspective of these detractors, Maduro’s push to introduce a new national cryptocurrency in 2018 came right as the country was being forced to pay off more than $150 billion USD in foreign debt.

According to politicians in Venezuela’s opposition party, as well as politicians in the US, Maduro’s Petro cryptocurrency was introduced under dubious legal parameters, potentially violating not only debt repayment laws but also sanctions imposed on the country from the US.

Today, the uncertainty over Maduro’s Petro continues. While the administration insists that the currency is usable and popular, critics do not believe that the currency is usable, and urge that residents of Venezuela do not use it. Some also believe that this is because residents of Venezuela do not know how to do so.

A white hand holds a cell phone demonstrating a fluctuating value of cryptocurrency and sits in front of a computer screen demonstrating a similar trajectory.

The controversial national currency of Venezuela, El Petro, is said to correlate one unit of currency to one barrel of the country’s crude oil. ©Austin Distel/Unsplash

Maduro’s Push to Popularize the Petro

In an annual speech to Venezuela’s Constituent Assembly, President Maduro announced that airlines flying from Caracas must pay for their fuel using El Petro. Analysts agreed that it is not clear if Maduro intends for foreign airlines to comply to this ruling, or if this will remain specific to Venezuela’s own aircrafts.

As of now, Venezuela’s Maiquetia Airport is serviced by airlines such as Air France, Iberia, TAP (Portugal’s airline), Air Europa, and Copa Airlines, out of Panama. Will these outside countries need to access the notorious Petro?

“I decree the sale of all fuel sold by the PDVSA for planes operating international routes be made in Petros from now on,”

said Venezuela’s President, Nicolas Maduro, to the country’s reigning assembly last week.

In addition, he continued, the Petro must be used by national citizens to pay for government documents like passports, and that the cryptocurrency will now be available for trading and purchase at every branch of Venezuela’s national bank, Banco de Venezuela.

Bringing the Petro to the Gambling Hall

In a public statement overturning a ban which had been in place since 2011, President Maduro announced that a new casino, located in the Humboldt Hotel, will be welcomed to Venezuela’s capital city, Caracas.

Maduro’s announcement marks the first time a casino has been legally opened in Venezuela since 2011, after a ban created by Venezuela’s former President Hugo Chavez. With that ban, Chavez not only disallowed the creation of new casinos, but mandated the closure of existing casinos and bingo halls across the country.

Prior to this new decision, gambling in Venezuela was only legal through a limited number of iGaming providers.

In Maduro’s recent statement, the President agreed that legal gambling would be possible in the Humboldt Hotel’s new casino, so long as the players are playing with Petros.

What’s more, he continued, the funds raised through this new legal venture will be used to support health and education programs in Venezuela.

Ensuring the Use of Petros — Without Exchange

This new decree will not only encourage gaming enthusiasts in Venezuela to pursue using El Petro — for many of them, possibly for the first time — but will mandate that they continue to do so.

Just a week before Maduro made this public statement to the country’s Constituent Assembly, Venezuela’s government announced that El Petro could not be exchanged for bolivars.

Many Questions Remain

As of now, Maduro’s administration has yet to answer several crucial questions about the country’s new, legal casino. For example, what will it be called? When will it open? Most crucially, people want to know: how will winners of Petro currency in Caracas’s new casino be able to cash in on their jackpots?

Others have wondered if the new casino in the Humboldt Hotel will have crypto ATMs for cashing out, or if guests will have to use El Petro’s designated app, Petroapp.

Critics Are Not Convinced

For those who have long been wary of Venezuela’s national cryptocurrency, this latest offer is still unconvincing. While the country does desperately need the health and education support a successful venture into gaming revenue could provide, critics encourage local gamers in Venezuela to approach Maduro’s new casino with caution.

Cryptocurrency and Casinos?

As the world of iGaming has continued to expand around the world, government regulators have reached a quandary of legislation. Many of these iGaming operators of both valid and illegal iGaming sites offer their services from overseas.

Beyond the difficulty of enacting or even writing robust legislation to regulate foreign iGaming providers, the boom of internationally provided iGaming sites also offers the question of currencies. How can players in a country which uses one currency gamble through a website offered through a country that uses a different currency?

Enter cryptocurrencies. Every cryptocurrency offers a slightly different methodology, but the end goal is the same: to navigate the murky waters of international currencies and iGaming.

Venezuela has claimed that El Petro is the first-ever national cryptocurrency, and whether or not that is true remains to be seen.

However, it is true that countries around the world — aside from Venezuela — have created restrictions on cryptocurrency-based gambling. These include the UK, Poland, Italy, Greece, the Netherlands, and Belgium.

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A colorful closeup of red, yellow, white, and brown barrels containing oil.

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