Prediction time: Soon every online casino will accept Bitcoin
The landscape of the gambling industry is changing at a rapid pace, not least because of the exponential growth of technology. Land based casino and bookmaker numbers are on a downward spiral, with consumers much preferring the convenience of both mobile and online gambling. Furthermore, internet alternatives offer a significantly larger range of products, as well as a much wider quantity of sports betting markets. However, the tide is once again turning, with Bitcoin set to make its claim as the dominant channel to deposit, stake and withdraw funds. What characteristics of the underlying framework make Bitcoin such a popular alternative to fiat, to both the casino operator and the player?
The rise of online casinos accepting Bitcoin has primarily been a product of new crypto-specific platforms entering the market, rather than established operators adopting the digital phenomena. This dates back to the original Bitcoin gambling website of SatoshiDice, whereby players would attempt to guess the outcome of a cryptographically generated dice. Although simple in nature, the many benefits that the dice game provided to players spurned on a plethora of new operators to follows a similar model. This included a public ledger that ensured each and every roll could be independently verified to ensure the fairness of the game. Not only this, but deposits and withdrawals were in the minutes and fees were minute.
Supply & Demand
New crypto-specific casinos grew in force, expanding their products above and beyond just dice games. In fact, we are now at a stage where Bitcoin casinos have the same, if not more, gambling products than their fiat counterparts. As one would imagine, this includes traditional casino games such as roulette, blackjack and video poker. However, the expansion does not stop there, as it is also possible to experience a live table dealer using Bitcoin as the currency of choice.
Consumers are provided with an ultra-simple barrier of entry, which is yet again another reason why online casinos accepting Bitcoin are seeing their customer-base rise month-on-month. This is because Bitcoin is not treated in the same light as fiat, which will be explained further. Nevertheless, more than 180 different jurisdictions have mirrored their domestic anti-money laundering laws from the recommendations of global standard setters the Financial Action Task Force (FATF). Since the mid-2000’s, the FATF have urged nation states to include online gambling within the remit of customer due diligence requirements, meaning that every new player must at some point be identified to offset any risks of criminal activity.
Other Advantages of Bitcoin & Crypto Casinos
The usual state of play is that a conventional casino will request a form of ID, such as a passport or driving licence, alongside a proof of address dated no earlier than three months. Unfortunately for the casino, this regulatory burden also requires the creation of a risk department, who not only need to verify the legitimacy of the player’s documentation, but they must also actively monitor suspicious betting behaviors. Although this sounds reasonable, risk departments and their respective personnel are highly uneconomical for an operator’s underlying costs, meaning that this quite often has to be passed on to the player in the form of higher house-edges.
However, it is not just the casino that must bear the burden of regulatory demands. After players have gone through the process of identifying themselves, further stagnation awaits ahead at the time he or she decides to make a withdrawal. This is because once again, risk departments need to perform additional checks on the player, which can result in a processing delay of up to 72 hours, sometimes more. Once this has been achieved, the player will then need to wait a further three to five days for their bank to validate the refund.
In this instance, both the player and the casino are forced to go through hoops to facilitate a simple transaction. The author of this article argues that at times identity checks are necessary, especially when significant amounts are involved. However, does each and every player need to go through the same process, even when deposit amounts are small?
Nevertheless, in stark contrast, online casinos accepting Bitcoin have the capacity to circumvent much of this red tape. As briefly noted earlier, Bitcoin and other cryptocurrencies are not treated within the same threshold as fiat money, meaning that operators can provide a far smoother gaming experience. Firstly, when it comes to opening an account, little information is needed. Most commonly, this will be nothing more than an email address and a telephone number. As Bitcoin is being transfer from the player’s wallet to the casinos wallet, no identification is requested. Moreover, it would take no more than approximately 10 minutes for the transaction to clear, although the anticipated Bitcoin client upgrade will reduce this amount quite substantially.
Moving forward, a circumvention of red tape also means that when it comes to withdrawing funds, there is no need to submit countless documents to adhere to anti-money laundering legislation. In most cases, withdrawal requests are processed within a couple of hours (sometimes minutes), which allows the player to receive their winnings in ultra-speed. Recognizing that the underlying blockchain technology is immutable to malpractice, online casinos accepting Bitcoin are happy to release funds without delay.
Will all casinos start accepting Bitcoin?
This leaves us on to a pertinent point of consideration. If crypto-casinos are enjoying an ongoing increase in their market share of the industry, what are conventional casinos doing in response? As the old saying goes – “If you can’t beat them, join them” seems highly fitting. Although still in its early days, highly established fiat casinos are now making plans to increase their payment method portfolio by allowing people to deposit and withdraw in Bitcoin. To illustrate this transition, in late 2017 BookMaker.eu became the first major player to accept it, with many more since following suit. Ultimately, it is highly likely that by the end of the decade you will be hard pressed to find an operator that doesn’t accept Bitcoin and its altcoin counterparts.
