Why is bitcoin gambling illegal in the US? Bitcoin gambling is illegal because a bitcoin is an item with value. Not only is it widely accepted that bitcoin can be traded easily for cash, but they can also be used as currency to purchase other items (including from legitimate merchants). There is mass public awareness that bitcoin have monetary value. "We are only gambling for meaningless online tokens" is not a valid defense, as it could be proven in court that nearly every bitcoin user is aware of its monetary value. Furthermore, many bitcoin gambling sites provide tutorials on how to buy and sell bitcoins for cash, thus again making it clear that they are marketing to real money gamblers, rather than those who had obtained bitcoin through non-monetary means.
Zynga Poker (popular play money site) chips are often bought and sold for real cash. Why isn't that illegal? There are a few reasons for this. First, all Zynga Poker members can get chips for free. Second, Zynga itself does not sell the chips, nor do they take any form of rake at their poker table. The chips are sold by third parties unrelated to Zynga. Third, Zynga chips do not have any value outside of Zynga Poker itself. Fourth, Zynga does not direct any of its members to sites where chips can be bought and sold, nor does it market itself as a replacement for existing online gambling sites. Fifth, and most importantly, Zynga chips are not assumed or presented to have any value. If Zynga Poker shut down tomorrow (and confiscated everyone's chips), nobody would have any civil or criminal claim against them, even if they purchased chips from a third party. However, if a bitcoin gambling site closed shop and kept everyone's bitcoin, there would definitely be cause for a criminal investigation against them.
I'm still not convinced that the feds can legally assign monetary value to bitcoin. They already have. In July, 2013, a man who ran a bitcoin scam (and stole only bitcoins -- no cash)
was arrested and charged by the SEC. This could not have been done if bitcoin were simply meaningless tokens being traded online.