You can gamble with any number of cryptocurrencies from the state of California.  Just understand there could be tax implications.

When it comes to gambling, winnings are considered taxable income in California and must be reported on your state tax return.

It's important to realize that many gambling sites will not report your winnings.  Those that do not include offshore sites, Daily Fantasy Sports, sweepstakes sportsbooks and local bookmakers.

Be aware that for certain types of gambling winnings, the payer is required to withhold federal income tax at a flat rate of 24%.  Just because the site you use may not report your winnings does not mean you should not include them in your filing.   Winnings over specific thresholds, such as $5,000 from sweepstakes or wagering pools, as well as sports betting, should always be self-reported.  Daily Fantasy Sports companies available in the state like DraftKings and FanDuel will almost certainly report your winnings if over a certain number.

Bitcoin's Status in California

In 2014, then California Governor Jerry Brown signed AB 129 into law, legalizing “various forms of alternative currency such as digital currency” to be used for the purchase of goods and transacting payments. This revised Section 107 of California’s Corporations Code which prohibited the use of “anything but the lawful money of the United States” to be traded or redeemed for goods and services.

Pros of Gambling Online With Cryptocurrencies

• Anonymity
• Speed of transactions - Many gambling sites process and send payouts same day, sometimes within hours.  Deposits can often be made more faster than with traditionally methods, even credit cards. 
• Lower fees
• Bypassing of traditional banking system - Therefore you won't encounter issues such as a credit card being declined.
• Often more generous bonuses

Cons of Gambling Online With Cryptocurrencies

• Lack of regulation and oversight - It is important to gamble only with sites that have a solid enough reputation or those that are well established.  It goes without saying that crypto gambling sites have not existed beyond the better part of a decade as digital currencies are a relatively new concept.
• Volatility in Price - When requesting a crypto payment, depending on the type of cryptocurrency, price fluctuations can occur during the transfer process.  With this in mind, Gambling911.com encourages its readers to exchange crypto into USD or other fiat currencies as soon as possible.
• Difficulty in recovering lost funds - It is critical to copy your cryptocurrency address correctly.  Check the first and last digits.

Bitcoin Exchanges Available in California

Gemini, CoinBase, Binance and eToro are well known cryptocurrency exchanges that can be used from the state of California.  You will use the exchange between your bank/credit card and crypto wallet.  Once again, never use the exchange directly with Skybook, as tempting as this may be.  Most exchanges prohibit their allocated Bitcoin addresses to be used for gambling purposes.