I've seen more and more news coverage talking about Bitcoin's role in online gambling. It seems that there will be more and more online casinos accepting Bitcoin due to the fact it acts more like a global currency that works well for privacy.
What do you think? Thoughts?
Hard one to call at this stage.
I've been hearing more and more about it along the online grapevine but it hasn't 'exploded' yet in a way that can be really useful. It was like mobile 10 years ago. Everyone wanted to do it, but it's only been in the last 6 months to a year that it's really taken off.
One to watch and see I think.
I think it certainly has the potential but there is a long way to go before it can hit main stream.
One of the big problems I see is people traditionally expect a certain level of security when storing their money and executing financial transactions. If anything goes wrong the bank generally covers the loss and refunds the amount.
Educating people as to the risks and how to protect themselves will take time. Alternatives include using an online wallet system but these technologies are relatively young and you end up with a central entity controlling the transactions and charging fees. It will be interesting to see how things develop.
The market finds a way to adapt, it's hard to say at this point what will emerge as the new standard. With bitcoin the volatility of the value is a concern, but the fact that is not centralized gives it a level or reliability.
I think it is something to watch.
We have so far setup 2 bitcoin casinos for clients of ours, and out of experience I can say there is no volatility, and it is very much mainstream by itself. By no volatility I mean, that since you keep a bankroll in bitcoins, to process deposits/withdrawals, you never have to deal with any conversions (like most people would think). Your only volatility for the money is when withdrawing it to real currency every once in a while. And what it comes down to, is will your profit be XX or XXX, depending on the current market prices. Why is it mainstream by itself...There are about $2bln worth of bitcoins out there in a few million users. Consider it a small country of people. Even at a low % of gambling users among them, it still makes up for a large gambling market that can most likely be compared to a country in Eastern Europe in terms of size.
Now about Security: You simply don't need it. All deposits are final with no refunds, there is no cc fraud, theft rings or anyone to really monitor and control. The entire verification process is worthless, as it doesn't prove anything. Of course in future this could change when it becomes more regulated.
And when it comes down to convenience, talk about instant withdrawals...ain't players gonna love that!
Also from an operator's standpoint, all transactions are FREE. No more processing fees of ANY sort.
So yes, there is future in it.
...and if you are planning to launch or promote a bitcoin casino, we might be the best people to talk to.
That is volatility though. If the operator keeps a bankroll in Bitcoins (purchased today) in order to pay out winning players, those Bitcoins can change in value due to market forces, and it's not a stable currency like GBP/EUR and operators can't peg their costs against Bitcoins. The uncertainty around the profit (or loss) is a huge problem. Large multi-currency operators have people dedicated to ensuring that their funds are stable in the long-term.Quote:
Originally Posted by Imperator
How easy is it for an operator to instantly buy/sell Bitcoins whenever a transaction is made? Because to avoid volatility, that's what you'd have to do (buy every time the player's wallet increases and sell every time they lose, automatically). Then you'd have an issue with the exchange margins, which albeit being low, would have a big effect over such a high amount of transactions. And what effect would buying €5m worth of Bitcoins to pay out a Jackpot winner have on the currency's value?
I'm actually going to a Bitcoin conference here in London next month, its not online gambling specific, but should be interesting. My concern with using Bitcoin for iGaming sites as a currency are the regulators- are they cool with it? Will they be cool with it? Watch this space I guess! If you are interested in learning more about Bitcoin, I did an interview with Roger Ver", about the currency in general, FYI.
Thx! Becky
Come on we know that the best way to use bitcoins is to get money out from countries where it may not be so easy because online gambling is illegal and other things are being more closely watched..........
It is important in the right places. See below.
http://calvinayre.com/2013/06/09/bus...ownload-chart/
Quote:
Originally Posted by PaddyPowerLuke
You've got it all wrong. Yes, the initial investment in bankroll will be volatile, but operators actually CAN peg their costs against bitcoins. And most do. When you operate within the eco-system you don't need to exchange anything. When you accept CAD in Canada, you don't exchange it to EUR. Same way it works for bitcoins. Your only actual non-bitcoin expense is employee payroll. Which of course can be managed.
As for how easy it is to buy/sell in case you ever need it...it happens instantly. There are a bunch of exchanges with automated APIs that you can hook up to your system.
The real question here is, when will the big online casinos and sportsbooks do their homework and jump on the ship. Especially the ones who have incredible problems in servicing markets like US, China, and others.
The other big question is, if or when the US banking regulators get stuffed enough that they would like to try and stop what Bitcoins is doing.
If so, they may or may not be successful, but it could have a very long lasting effect. We have seen similar situations with a handful of eWallets we never thought would be effected as well.
Rick
Universal4
Rick, yes they could. However, it is not controlled by a single person/company. There is no real way to take it down as it is p2p unless they hit the entry and exit points, which are the exchanges. However, in light of recent events and I will point out Becky's interview with Roger Ver, the industry is becoming quite backed by VCs and the likes. These people know how to drive hype and take companies to IPOs, and the only way they can profit is take Bitcoin to the mainstream. Government will want to tax it, to make profit out of it too, and recently the FINCEN had a statement about how they really like the idea, they just don't know how to properly control it yet but they are working on it. So I see Bitcoin as part of the future, and if the gambling industry takes it seriously, it could become part of the gambling landscape, especially for countries with processing or legislation issues.
We take it seriously already.
One thing seems certain, this whole Bitcoins situation is gaining momentum.
I agree it is gaining momentum.
I don't think it really has anything to do with the VC funding though, the ewallets that suffered major setbacks (some of them folding) were VERY well funded.
Yes, the governements will all want to find a way to tax and make money from it, and if they all decide they can not capitalize on it enough, various governements will get together and legislate it away....
Rick
Universal4
If we are talking about Bitcoin in general and not gambling, I think we are in a very defining moment right now. The bitcoin companies and exchanges either have to become regulated and comply with different laws, and be let to go into the mainstream, or they have to stay in the shadows and cater to grey or black market industries. To go mainstream would have its own implications as they would have to have a better control and KYC procedures, and bitcoiners will have to forget about the 'anonymous' transactions they so much brag about.
Yep,
And I think a large portion of those who support Bitcoin, and certainly many who have helped Bitcoin become accepted at all, are those who rely on and really push the anonimity. If that goes away, so will a portion of that support.
And if it does not become mainstream, it will never gain the acceptance by the "man-on-the-street" which it needs to continue to grow. If it stays hidden in the grey market/black market, as you put it, there is even more incentive and ammunition for the various governments to fight against it.
Rick
Universal4
Yep :). Either way it is good for gambling, a market by itself. The higher adoption, the better it will be for us (the gambling industry). It solves a huge problem with processing and fees. If a payment processor currently charges 5% on average, and a sportsbook is running on 9-12% margin, the processor drains the business quite a lot. When we have free deposits and withdrawals, this doubles the net profit, which in turn puts more money on the table for growth.
Below is a great little video if you have never heard of bitcoin. The video is very "clean" and professional. However because of the whole situation where the currency is used by black markets to anonymously buy and sell anything from illegal drugs to weapons and ammunition it is quite a hard association to break (even if they're a completely innocent party), particularity as media has caught onto this. The concept is fantastic, and I've heard it uses peoples cpu's when they are in idle to encrypt the coins, which makes them virtually impossible to replicate. I think this will be an interesting one to watch and see what happens. I'm of the opinion like others have mentioned, that governments will get involve to tax it somehow.
http://www.youtube.com/watch?v=Um63OQz3bjo
It will be interesting to see if this is the way the industry goes. Seems like it's still a ways off...
BitCoins are RARELY mined by cpu's anymore.(although this used to be popular) After CPU's it moved to GPU's (video cards) and that still happens, but bitcoin mining is moving mostly to ASIC's (systems built specifically for mining).
Rick
Universal4
And it is also getting harder and harder to mine them.