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Gamblers bet on Bitcoin for anonymous online wagering

Adam Bender | June 13, 2014
Bitcoin could give a boost to online betting due to the digital currency's anonymous nature and ability to circumvent anti-gambling laws in the United States and other countries.

"I imagine it's just a matter of time until they fail in their attempts to come after Bitcoin gambling," he said.

"We have censorship-resistant technology. As we're building the Bitcoin ecosystem, we're learning from past censorship efforts and past legal crackdowns and we're building things that are deliberately censorship resistant."

Historically, the US Justice Department has shut down fiat-based online gambling sites by cutting off their ability to transact with customers, he said.

"They can't do that with Bitcoin. That's impossible. The only way they could do it is to shut down the Internet."

Next page: The state of Bitcoin gambling

State of Bitcoin gambling

There are hundreds of online gambling sites that accept Bitcoin, but they tend to be specialist sites and few if any are mainstream gambling companies, said Canning.

"Most of them are very new" and only about a dozen are worth gamblers' time, he admitted.

SatoshiDice, a simple dice game named for the mysterious founder of Bitcoin, Satoshi Nakamoto, is the most popular Bitcoin gambling site, said Canning.

In SatoshiDice, a player rolls a number between one and 100 after placing a bet on what they're going to roll. Canning said the odds are slightly better than Blackjack and quite a bit better than slots.

The game has seen "thousands and thousands of micro transactions — just people betting a few cents per roll."

We contacted popular Australian companies that offer online betting — TabCorp, Sportsbet and Tom Waterhouse — but none would comment about Bitcoin or if they would accept the cryptocurrency in the future.

Gambling sites that choose to accept Bitcoin stand to benefit, asserted Canning. "Advantages to the customer are advantages to the operator."

Bitcoin allows online gambling site operators to widen their potential customer base to the entire world, regardless of any individual country's laws, he said. The quicker sign up process enabled by Bitcoin also means users are less likely to abandon ship during registration, he said.

Bitcoin operators can choose to be anonymous, avoiding taxes and other legal responsibilities, he said.

Also, the instant nature of Bitcoin transfers can also help websites avoid fraud, he said.

For example, with traditional payments, customers can ask their bank to reverse charges after they've lost a bet. And Bitcoin operators don't have to deal with fraudulent IDs submitted by identity theft criminals, he said.

The cost savings from some of the above benefits can be passed on to the customer, said Canning.

"They can actually pay out more to the customer and make just as much money because their expenses are lower."

Canning said he does not view the price volatility of Bitcoin as a problem for gamblers or operators. The amount of volatility in Bitcoin is lessening with time, and regardless, Bitcoin gambling isn't about making a fortune, he said.

"Most people are not gambling with the expectation of increasing their purchasing power," he said. "Most people are gambling for fun, for entertainment."

"For recreational gamblers, which are the majority, I don't see a problem."

 

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