Bitcoin: The Future of Online Gambling?

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BitcoinsBitcoin, a crypto currency, has taken the world by storm within the past year after slowly gaining popularity since inception. Bitcoin is now accepted as payment by a variety of businesses, including coffee shops and restaurants to real estate and online sites like WordPress.com and Reddit.

The global acceptance of bitcoin has become quite a phenomenon, and while many industries have benefited from the use of bitcoin, the one that may allow the currency to truly explode is online gambling.

Already a Viable Market

Bitcoin gambling sites number around one hundred at this point and that figure is growing every day. According to a recent survey, one of the biggest bitcoin accepting casinos reported having more than 25,000 real money players. It is safe to say that bitcoin gambling is no longer a curiosity, but rather a viable option for online gamblers. These sites offer bitcoin online poker, online sports betting, along with casino games and lotteries.

Most deal exclusively in bitcoin, while some could be considered hybrids; Accepting bitcoin payments in addition to regular payment methods. An example of this is WinPoker, a poker and casino brand that accepts bitcoin payments as well as Visa, Neteller and Skrill.

Bitcoin Gambling Advantages

There are several significant advantages that bitcoin based gambling sites have over traditional online sites that use fiat currencies, such as the United States Dollar and Euro. Bitcoin’s attractiveness to online gambling operators is a no-brainer.

Transaction Fees Are Basically Nothing

Bitcoin ImageAlmost all bitcoin transactions are free of charge, meaning sending bitcoins from one bitcoin address to another is the most cost effective way to send funds available today.

Think about, if a US citizen wanted to wire money from the United States to a friend in Asia or Europe, he would need a long list of banking information or to send a money transfer using a service like Western Union or MoneyGram. Not only would these methods be met with a possible $100 or more in fees, but they would take much longer, as well. Bank wires can take several business days or even up to a week depending on processing times.

It’s not much of a stretch to say that bitcoin has already eclipsed the banking systems in Europe and the United States in terms of cost and convenience to consumers. Sending bitcoins are free and available to the recipients normally a few hours after the transaction is sent.

One of the largest costs for online gambling sites is payment processing. While players don’t normally pay fees to deposit and withdraw into online gambling sites, e-wallets such as Neteller and Skrill have fees attached to each transaction. All forms of fiat currency based deposit, and withdrawal has some sort of fee attached, whether it be checks, credit cards, money transfers, etc. These are normally paid by the sites, instead of passed off onto customers.

Using bitcoin makes these costs almost nonexistent, saving the sites an unbelievable amount of money in the process. Instead of spending x amount on payment processing each month, this money can be put back into the sites and in turn offer better deals, bonuses and odds to players.

Lower Rake, Better Odds

It’s not shocking that bitcoin casinos, poker rooms and online sportsbooks offer the best odds online. Bitcoin poker rooms have the lowest rake in online poker history along with VIP rewards programs and rakeback. Bitcoin casinos have much higher payout rates than land based casinos or even their fiat based online counterparts, these operators regularly have payout rates at or above 98%. Finally, bitcoin based sportsbooks and exchanges offer some of the best prices online.

Anonymity

Bitcoins also allow users to do what they want with their own money anonymously. The same can be said for most bitcoin based gambling sites who rarely ask for any information from their clients. A screen name is usually a must for poker rooms, but even emails are optional in a lot of cases.

All of us who have cashed out of traditional online gambling sites know that gambling operators can ask for a litany of personal information. Faxing documents, credit cards and utility bills are a part of the process for nearly every type of fiat currency based online gambling site.

This is not the case for bitcoin. Withdrawals will be sent to the bitcoin address you provide, and there will be no “account verification” process to determine your identity or any other hoops to jump for players to jump through before they can cash out. Not to mention having to wait weeks, sometimes even months until payment arrives, which sadly has been the case for many US gamblers. It is a simple no-nonsense process cashing out via bitcoin.

It is no business of the government’s to know what you are doing online. Nor is it necessary for online gambling sites to know your personal information, including your home address and name, let alone your credit and banking information.

Not Vulnerable to Seizures

One of the things that make bitcoin so remarkable is that there is no central bank pulling the strings and that it is not tied to any sort of government regulation or control. This is especially beneficial for online gambling, especially in jurisdictions where offering these services to citizens is illegal or is a grey area.

The United States is a perfect example. US citizens have had to be careful where they keep their money in recent years, especially after the “Black Friday” fund seizures and indictments of the two largest poker sites in the world, PokerStars and Full Tilt Poker. These funds were held over several weeks by PokerStars and after two years, Full Tilt’s players are only now beginning the remission process. The amount of funds seized from these poker room held accounts was over $350 million.

With bitcoin, this is not possible. Governments cannot seize bitcoins like they would with traditional bank accounts because they are not connected to any worldwide banking authority. Furthermore, they don’t have access to the bitcoin addresses connected to online gambling.

Another legal caveat is that bitcoin, at least for now, is not considered money by the vast majority of the world’s governments. Of course, this may change as bitcoin rises in popularity, but at the moment it is essentially untouched from a legal perspective.

Bitcoin’s Online Gambling Future

The crypto currency and online gambling markets are a match made in heaven. Some mainstream fiat based sites have already started accepting bitcoin as a deposit method. It is only a matter of time before it catches on with leading European online gambling providers and emerging markets across the world.

Bitcoin is no longer a fringe currency that is just an idea. While bitcoin is out of its infancy, we are still at the beginning of the bitcoin craze – and it is only going to get bigger. It’s a natural fit for online gambling markets of all kinds and its increase in popularity will be powered in large part by online gaming.

September 17, 2013: • No Comments

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