Is Tether Betting Legal in Australia? Regulation, Risks, and ATO Rules

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Author: Alexander Mullens Last updated: May 2026 Reading time : 17 min

Every week, I receive at least two messages from Australian punters asking the same question: “Am I going to get in trouble for betting with USDT?” The anxiety is understandable. You are using a digital currency that operates outside the traditional banking system to place bets at platforms that do not hold Australian licences. It sounds like it should be illegal. The reality is more nuanced than that — and more nuanced than the reassuring “it is fine, do not worry” that most crypto gambling guides offer.

The legal framework governing gambling in Australia was not designed with cryptocurrency in mind. The Interactive Gambling Act was written in 2001, when Bitcoin did not exist and “stablecoin” was not a word. Regulators have been retrofitting that framework to address crypto gambling, with mixed results. Some aspects of the law are clear. Others sit in genuine grey areas that have not been tested in court.

What I can do in this guide is walk you through the law as it stands, the enforcement actions that have been taken, the self-exclusion mechanisms that exist, and the tax obligations that apply to USDT betting gains. I am not a lawyer, and nothing here constitutes legal advice. But I have spent years tracking how Australian regulation intersects with crypto betting, and the information here is the most comprehensive treatment of this topic you will find in the Tether betting space.

The single most important distinction to understand upfront: Australian law primarily targets the operators, not the players. The IGA makes it an offence for operators to offer certain gambling services to Australians. It does not, in its current form, create a criminal offence for individual players who access offshore platforms. That distinction shapes everything that follows.

The Interactive Gambling Act 2001 and Crypto

I pulled out the Interactive Gambling Act 2001 for the first time in about 2018, when a client asked me whether accepting USDT at an offshore sportsbook violated Australian law. Reading legislation is not how I normally spend my evenings, but the exercise was instructive — and what I found has shaped my understanding of this space ever since.

The IGA prohibits the provision of “interactive gambling services” to persons physically present in Australia. The key word is “provision” — the law targets the supply side, not the demand side. An operator that offers online gambling to Australian residents is committing an offence. An individual who accesses that service is not explicitly criminalised under the Act. This asymmetry is deliberate: the legislation was designed to regulate the industry, not to prosecute individual punters.

The Act defines “interactive gambling service” broadly enough to capture online sports betting, online casino games, and online poker when offered in real time. Some forms of gambling are excluded — licensed domestic sports betting, lotteries, and some forms of in-play betting offered by licensed Australian operators fall outside the prohibition. The practical effect is that Australia has a two-tier system: licensed domestic operators that comply with the IGA and ACMA’s regulatory framework, and offshore operators that offer services to Australians without Australian licences.

The amendments made to the IGA in 2017 strengthened this framework significantly. They broadened the definition of prohibited services, gave ACMA new enforcement powers, and introduced the ability to block websites at the ISP level. These amendments were primarily aimed at offshore poker and casino sites, but their scope is broad enough to capture any form of online gambling — including USDT sportsbooks — offered to Australian residents without domestic authorisation.

Cryptocurrency does not receive specific mention in the IGA. The Act does not distinguish between fiat-denominated and crypto-denominated gambling services. An offshore sportsbook accepting USDT deposits from Australian players is in the same legal category as one accepting credit card deposits — the currency is irrelevant to the operator’s regulatory status. What matters is whether the service is being offered to someone in Australia, and whether the operator holds the required authorisation.

One area where the IGA’s silence on crypto creates genuine ambiguity is around decentralised gambling protocols — platforms that operate without a central operator, using smart contracts to process bets. The IGA’s prohibition targets a “person” who provides a gambling service. If the service is run by an autonomous smart contract with no identifiable operator, it is unclear whether the Act applies. This is a theoretical edge case for now, as most USDT sportsbooks and casinos have identifiable operators, but it illustrates the gap between the legislation and the technology it is trying to regulate.

ACMA — the Australian Communications and Media Authority — has been given enforcement powers under the IGA, and those powers have teeth. Since 2019, ACMA has blocked over 1,296 illegal gambling websites, using DNS-level blocks that prevent Australian internet users from accessing the sites. The blocked sites include both fiat and crypto gambling platforms. ACMA does not need to prosecute the operator in an Australian court to take action — it can direct Australian internet service providers to block access at the network level, and it has done so aggressively.

The implication for USDT bettors is straightforward: the platform you use today might be inaccessible tomorrow if ACMA decides to add it to the block list. This has happened to several crypto gambling sites that were popular with Australian players, and it can happen without warning. A VPN can circumvent DNS blocks, but using a VPN to access a blocked gambling site introduces its own complications — some platforms prohibit VPN use in their terms of service, and a platform that detects VPN use may freeze your account and your balance.

ACMA Enforcement Actions Against Crypto Gambling Sites

ACMA’s enforcement approach tells you more about the regulatory direction than any policy document. I have been tracking their blocking actions since 2019, and the pattern is clear: they started slowly, built institutional capacity, and have been accelerating.

The most prominent recent action — and the one that caught mainstream attention — was the blocking of Polymarket, the prediction market platform, in 2025. Polymarket was not a traditional sportsbook. It operated as a decentralised prediction market using crypto. ACMA’s decision to block it signalled that the regulator interprets the IGA broadly enough to capture crypto-native platforms that do not fit neatly into traditional gambling categories. If ACMA considers a prediction market to be an interactive gambling service, crypto sportsbooks and casinos accepting USDT are firmly within their enforcement scope.

The blocking mechanism itself is blunt but effective. ACMA directs Australian internet service providers to prevent DNS resolution for specified domains. When you type the blocked site’s URL into your browser, the DNS lookup fails and the page does not load. This does not require any cooperation from the offshore operator — ACMA acts unilaterally through Australian ISPs. The blocked site continues to operate globally; it simply becomes inaccessible through standard Australian internet connections.

Paolo Ardoino, Tether’s CEO, has shown a combative streak toward regulatory sceptics — when S&P rated USDT’s stability as “weak,” he responded with characteristic bluntness, noting that he was proud to be questioned by the same agency that missed the subprime crisis. That attitude reflects the broader tension between crypto operators and traditional regulators. But ACMA does not operate on reputational ratings. It operates on statutory authority, and its willingness to block sites has made Australia one of the most active enforcement jurisdictions in the Asia-Pacific region for online gambling.

Online gambling participation among Australian adults has been climbing — from 8% in 2017 to 11% in 2021, and likely higher now. That growth is part of what drives ACMA’s enforcement posture. More Australians gambling online means more regulatory attention, more political pressure, and more blocking orders. The crypto segment of that market is growing faster than the fiat segment, which means USDT sportsbooks and casinos are increasingly likely to attract ACMA’s attention.

For the individual punter, the practical takeaway is risk management. Do not keep a large USDT balance at any single offshore platform. Withdraw winnings promptly. And have a contingency plan — including a record of your account balance and transaction history — in case a platform you use gets blocked. The blocking does not mean your funds are confiscated, but it does mean accessing your account to withdraw becomes significantly more complicated.

It is worth noting that ACMA’s enforcement extends beyond just website blocking. The authority has also issued formal warnings to payment providers, threatening action against companies that facilitate transactions with illegal gambling services. While crypto transactions are harder to police than traditional banking channels, the on-ramp and off-ramp points — Australian exchanges where you buy and sell USDT — are centralised entities subject to Australian law. If ACMA were to pressure Australian exchanges to restrict transactions associated with gambling, the fiat-to-USDT conversion step could become more complex. This has not happened yet, but the regulatory tools exist.

BetStop: Does Self-Exclusion Apply to Offshore USDT Sites?

BetStop launched as Australia’s national self-exclusion register, and the numbers tell a story of real demand: 35,671 people had registered by December 2024, with 26,020 active exclusions at that point. The system requires all licensed Australian wagering operators to check new customers against the register and block those who have self-excluded.

The critical limitation for USDT bettors is jurisdictional. BetStop applies to operators licensed in Australia. Offshore crypto sportsbooks and casinos — which hold licences from Curaçao, Malta, or other jurisdictions — are not bound by BetStop. They do not check the register, they do not block registered users, and they have no legal obligation to do so under Australian law.

This creates a gap that regulators are aware of but have not yet closed. A person who self-excludes through BetStop to address a gambling problem can still create accounts and deposit USDT at offshore platforms with no friction. The self-exclusion system, in its current form, does not extend to the crypto gambling ecosystem that operates outside Australian licensing.

Some offshore platforms offer their own self-exclusion and deposit limit tools, independent of BetStop. These are voluntary measures implemented by the operator, and their effectiveness depends entirely on the operator’s willingness to enforce them. The quality of these tools varies enormously — some platforms offer robust deposit limits, cooling-off periods, and session time reminders, while others offer a checkbox in the settings that does little in practice.

The gap between BetStop’s reach and the reality of offshore crypto gambling is one of the most significant consumer protection issues in the Australian betting landscape. For punters who recognise they have a problem, the tools that exist within the regulated domestic market do not follow them into the unregulated offshore space. If you or someone you know is struggling with gambling, the National Gambling Helpline at 1800 858 858 provides confidential support. Some offshore platforms do offer their own self-exclusion and deposit limit tools, but these vary widely in quality and enforcement.

ATO Tax Treatment of USDT Betting Gains

Taxes are the part of crypto betting that nobody wants to talk about, and the part that can cost you the most if you get it wrong. I sat down with a tax accountant who specialises in cryptocurrency in early 2025, and the first thing she said was: “Most of my crypto gambling clients did not know they had obligations until they got a letter from the ATO.” That is not a position you want to be in.

The ATO treats USDT as a digital asset subject to capital gains tax — not as foreign currency. This is a crucial distinction. If USDT were classified as foreign currency, the tax treatment would follow the forex rules. Instead, the ATO considers every disposal of USDT to be a CGT event. A disposal includes selling USDT for AUD, exchanging USDT for another cryptocurrency, or using USDT to purchase goods or services.

For bettors, the practical implication is this: when you buy USDT with AUD, you establish a cost base. When you later sell that USDT back to AUD, the difference between your sale price and your cost base is a capital gain or loss. Because USDT is pegged to the US dollar, the gain or loss on the USDT itself is usually small — it is driven primarily by AUD/USD exchange rate movements rather than USDT price fluctuations. But it is still a taxable event, and the ATO expects you to report it.

The treatment of betting winnings themselves is a separate question. Under Australian tax law, gambling winnings are generally not taxable for recreational punters — they are treated as windfalls. However, if the ATO considers your betting activity to be a business — regular, systematic, carried out with a profit-making intention and using commercial methods — your winnings may be assessable income. The threshold between recreational and professional betting is not precisely defined and depends on the circumstances of each case.

The Australian Treasury has been developing a regulatory framework for stablecoins that would classify fiat-pegged tokens like USDT as “tokenised stored-value facilities.” If this framework is enacted, it could change the tax treatment of USDT — potentially reclassifying it as a payment instrument rather than a digital asset. That change would simplify the tax position for bettors, but it has not happened yet. Until it does, the CGT framework applies.

Record-keeping is not optional. The ATO has data-matching programmes with Australian cryptocurrency exchanges, and it can identify discrepancies between reported transactions and exchange records. For every USDT transaction — purchase, transfer, deposit, withdrawal, sale — record the date, the amount in USDT, the AUD equivalent, and the purpose. A detailed guide to USDT betting tax obligations covers the specific record-keeping requirements and common pitfalls.

Australia’s Emerging Stablecoin Regulatory Framework

What happens next in Australian stablecoin regulation will shape the USDT betting landscape for years. I have been following the Treasury’s consultation papers closely, and the direction — while still uncertain in its details — is becoming clearer in its intent.

The proposed framework for “tokenised stored-value facilities” would bring fiat-backed stablecoins under a licensing regime. Issuers would need to meet requirements around reserve composition, disclosure, and consumer protection. The parallels with the EU’s MiCA regulation are intentional — Australian policymakers have been studying MiCA’s approach, though the specifics differ.

MiCA, which took full effect in the EU, requires stablecoin issuers to hold 60% of their reserves in EU banks, pass regular audits, and obtain a licence from a member state regulator. USDT has not complied with these requirements, leading to its delisting from several European exchanges. The impact on European USDT bettors has been real — reduced exchange access, fewer on-ramps, and a shift toward USDC, which has obtained MiCA compliance.

Australia’s approach is likely to be less aggressive than MiCA but more structured than the current vacuum. The Treasury has signalled interest in regulating stablecoin issuers rather than banning stablecoins outright. For USDT bettors, the most likely near-term impact would be changes to how Australian exchanges handle USDT — if new licensing requirements apply to stablecoin trading, exchanges might restrict USDT pairs or impose additional compliance steps on AUD-to-USDT conversions.

The broader picture is one of convergence. Governments worldwide are moving to regulate stablecoins, and Australia is neither leading nor lagging that trend. The window of minimal regulatory friction that current USDT bettors enjoy will narrow over time. That does not mean USDT betting will become illegal or impossible — it means the on-ramp and off-ramp processes will likely become more regulated, more documented, and potentially more expensive.

For now, USDT betting in Australia operates in a space defined more by what the law does not explicitly address than by what it prohibits. The IGA targets operators, not players. ACMA blocks sites but does not prosecute individuals. The ATO taxes disposals but does not prohibit holdings. And the Treasury is building a framework that will eventually bring more clarity. Until that clarity arrives, informed decision-making — understanding the rules as they exist, not as you wish they were — is your best protection.

Legal FAQ for Tether Betting in Australia