In May 2022 Litecoin activated MimbleWimble Extension Blocks. MWEB is an optional side compartment of the chain where amounts and addresses stay hidden from everyone except the two parties involved. You move coins in, transact privately, move them back out. Nothing about it is illegal and nothing about it is on by default.
The practical problem is the address format. An MWEB stealth address begins ltcmweb1, and casino cashiers do not handle it. Neither do several large exchanges; Binance will not credit an MWEB deposit at all. Send a withdrawal to an ltcmweb1 address that the operator never supported, or fund an account from one, and the money can sit outside the casino’s view with nobody able to move it. Support cannot reverse a Litecoin transaction any more than you can.
The upgrade cost Litecoin something too. Five South Korean exchanges, Upbit, Bithumb, Coinone, Korbit and Gopax, dropped LTC from won trading in mid-2022 because the option to transact privately conflicts with local anti-money-laundering rules. The coin did not become private by default. The possibility alone was enough.
And the feature is barely used. Elliptic measured the share of circulating supply sitting inside extension blocks at a rounding error, and full desktop support only shipped with Litecoin Core 0.21.3 in March 2024. So MWEB is a genuine privacy tool that almost nobody touches, whose main effect on a gambling player is one more way to fire coins into a void. Keep a standard address for casino play. If you want to use MWEB, use it between your own wallets and peg back out before you visit a cashier.