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The market for Bitcoin holders is huge. At present there are over 12.4 million coins in circulation with another 9 million yet to be mined.
A general rule of thumb is 10% of the population are gamblers so this can give us a ballpark idea of the amount of coins available for gambling.
We also feel that as there are limited options for Bitcoin holders to spend their coins at this stage, which invitingly makes customer conversion easier.
The advantages for operators are illogically the very same fears that are circulating at this moment regarding Bitcoin. The KYC process (Know Your Customer) has the potential to be more efficient than existing processes. As wallet codes of Bitcoin holders do not disclose customer data, it will be so easy to set up a central database amongst operators to instantly verify gaming Bitcoin holders without the fear of customer poaching. This in turn can also be used for self-exclusion purposes to protect the vulnerable.
We acknowledge Bitcoin is volatile in exchange to fiat currencies; however, casino and betting businesses operate in tokens, credits, chips and units. So, customers may transfer coins instantly into the gaming wallet, play at any unit (1.0 or 0.00001 Btc), winnings go straight back into the gaming wallet and the operator clears all wallets back to the customers' Bitcoin account at the end of every gaming day. Thus, the customer may play in units they are comfortable with, which encourages more customer longevity, increasing retention and volume of play and deposits.
The operator has the ability to clear customer wallets and send coins back to their account which reduces their risk in currency fluctuation.
For land based Betting shops, Bingo Halls and Casinos, imagine establishments working entirely in Bitcoin and not having any cash on the premises. This reduces the risk of any hold-ups, employee theft, opportunist or targeted theft as there is nothing to steal. Any customer facing employee working with large volumes of cash will be delighted with that prospect.
Certainly is. Any i-gaming operator will know having had to work with e-wallets, bank transfers, credit cards and impatient customers waiting for a deposit to come through or winnings withdrawn to a bank account. Instant deposits mean good customer service.
Withdrawals have been publicised by Bitcoin advocates as instant which is something we would not recommend though. We would strongly advise any operator to place withdrawals of a certain limit into pending to verify they are legitimate before paying out only for their own protection.
Bitcoin, as any Cryptocurrency, sits in a void right now. There isn’t presently the legislation to forbid or prosecute operators right now regardless of their SOP's, or lack of, and this is only encouraging a darker side to the business. Customers have no regulatory body to protect their interests or to arbitrate a dispute with an operator and this has the potential to throw the gaming industry backwards in terms of social responsibility.
At the moment, existing operators are not in any rush to enter into Bitcoin. They seem to feel that their operations must work with Bitcoin simultaneously and this will confuse their operations. We tend to agree here and advise strongly against this. However, our suggestion is to operate a ‘Bitcoin only’ site apart or work with an exchange than will convert Bitcoin into cash at the point of entry, being either landbased or i-gaming.
Ironically, regulators would have a complete transparent view of operators, able to see deposits in real time and trace customers play for the very first time in gaming history.
At present, the governments are still undecided and until the major operators express a need for Bitcoin regulation, then regulators do not seem at haste to act.
In light of this week’s events with the MtGox Exchange shutting down, forced regulation may be considered in the not too distant future. There has been a known “transaction malleability” bug since 2011 which enabled nefarious attackers to create a parallel transaction alongside a genuine transaction that took place. This bug only affected exchanges etc. who hadn’t taken the trouble to update their software systems to counteract the problem and the Bitcoin community are now working together to completely resolve the issue across the entire network.
Everyone should be prudent and guard safely anything of value and Bitcoin is no different. There have been cases of hacking due to neglect but it doesn’t seem appropriate to dismiss Bitcoin because of this. There are methods available for protecting Bitcoin and we don’t advise anyone to keep all of theirs in the same wallet but the Bitcoin still looks a much safer payment system than using a credit card, e-wallet or cash.
Bitcoin is a new concept and we agree requires thinking out of the box but should not be banished without knowing the full facts and understanding the benefits.
See here for the ORIGINAL ARTICLE page 21