How do online casino/gambling sites manage & maintain their bitcoin holdings?

[ChiBitCTy]

I’ve always wondered ...
When you deposit btc on a gambling site, they guarantee the value of your coins in your countries fiat currency (hence it “won’t fluctuate“).  I’ve always wondered how online casinos buy/sell/store their crypto deposits. Many sites even offer hefty bonuses to those who open an account and deposit using cryptocurrency.

How do they do this profitably, or at times maybe at a slight loss, during the many Wild ups and downs of crypto market pricing? With Bitcoin’s price volatility as high as it is..what if it crashes to $1,000 a coin ...will these casinos remain afloat or solvent?  I would imagine they need a large buyer and seller standing ready at all times ..how does this become, with these “tainted” coins...Meaning trades that Some exchanges like Coinbase (the paypal of crypto) would deem inappropriate as well as certain banking institutions.

Basically, does anyone know how it all works ?

[chaser15]

If I remember correctly, the same issue (not exactly the same though as what you are pointing out) was discussed here before.

(Self-funding + deposits + gambler's losses) = (Bankroll = Crypto = Cold Wallet). As per terms, funds in the cold wallet are untouchable unless necessary. These were all in the terms they signed for regulation.

Expenses/Salaries/Maintenance = all in Crypto payment. So basically, ups or downs, bitcoin volatility doesn't matter.

But I don't know how it works on a gambling site that accepts fiat deposits. And it just came up to my mind now if there's a crypto-gambling site that accepts fiat deposit?

I don't know f my replies contribute to what you are trying to know. I'm interested in the topic. Let's wait for another response.

[tyKiwanuka]

Basically, does anyone know how it all works ?

I can only share my experience from my agent and that company more or less insta-exchanges my crypto deposits into fiat. Plus they charge some more fees and have low exchange rates. And imo this is the only way to ensure you remain solvent, when you accept crypto payments, but the gambling/betting accounts is run in fiat currency. These gambling sites (and agents) don't need to gamble, they make money anyway.

As for the bonuses, this is a safe business, otherwise such generous "gifts" wouldn't be given. In games of chance, nearly all customers will lose their deposit+bonus before they are finished with their rollover requirements. Every now and then a customer might get lucky to get to the point to withdraw some winnings, but this is easily covered by the losses from all those other customers. In skill-based games, that ratio is a bit more disadvantageous for the operator and thus the bonuses are smaller - you maybe get 100% bonus with an amount X as max requiring 5-10x rollover and minimum odds of around 2. You will have more customers, that will be able to withdraw, but it's still profitable. In an ideal scenario, you already make money with giving out bonuses and you will maybe be able to keep 30% of customers longterm and these will lose more at your site then.

[JeromeTash]

Payments are mostly made in crypto so 1 BTC you send remains 1 BTC regardless of the volatility. I think Casino/Gambling business is very profitable especially if the platform is well marketed and it keeps receiving new gamblers now and then. Remember that not everyone who deposits will win a bet, make profits and withdraw. In fact very few gamblers profit out of gambling... The rest of the profits are for the casino.

[TimeTeller]

Basically, does anyone know how it all works ?

I can only share my experience from my agent and that company more or less insta-exchanges my crypto deposits into fiat. Plus they charge some more fees and have low exchange rates. And imo this is the only way to ensure you remain solvent, when you accept crypto payments, but the gambling/betting accounts is run in fiat currency. These gambling sites (and agents) don't need to gamble, they make money anyway.

As for the bonuses, this is a safe business, otherwise such generous "gifts" wouldn't be given. In games of chance, nearly all customers will lose their deposit+bonus before they are finished with their rollover requirements. Every now and then a customer might get lucky to get to the point to withdraw some winnings, but this is easily covered by the losses from all those other customers. In skill-based games, that ratio is a bit more disadvantageous for the operator and thus the bonuses are smaller - you maybe get 100% bonus with an amount X as max requiring 5-10x rollover and minimum odds of around 2. You will have more customers, that will be able to withdraw, but it's still profitable. In an ideal scenario, you already make money with giving out bonuses and you will maybe be able to keep 30% of customers longterm and these will lose more at your site then.

He is right about that. When a certain gambling site accepts crypto, the exchange rate of converting from fiat to crypto will have lower exchange rate as compared to existing market rate.
That alone, they can already get substantial amount from the player even if they are saying they are charging minimal fees.

Also, most casino sites have good amount of bankroll even at the start.
The reason why there are some players will ask about the bankroll status to ensure they can pay in case someone wins.
But in any case, some casino sites will attract players to join in their bankroll investment.
This is one way also, to increase their money on their coffer.

[ChiBitCTy]

Thanks everyone for your insightful replies! My post rambled a bit but you all did get the gist of what I was trying to ask. I had assumed there was some sort of fiat to bitcoin holding ratio they stuck to. Also, kinda forgot how “ the house always win” too. I guess because I’m such an amazing gambler and never lose ( I wish ). 

My questions I guess were really more so sports betting casinos..which I failed to state but most everything I suppose still applies. As for sites that accept both fiat and crypto ..Bovada is the most commonly used and well known in the states and they accept both. Actually found out they even took BTC just this past year. Before it was pay with CC or money order /wire then wait weeks/months for some sketchy check to arrive.

[Sadlife]

Some gambling sites i have seen is peer to peer meaning their probably storing and holding their crypto in a single wallet regardless of the fluctuations. Maybe they would hit extremely low profits if the price goes down. To recover from this it's either their extremely wealthy or has other sources of income. And some uses fiat for their sites but considering the financial, i think both of them are volatile at the moment.

[Debonaire217]

If their system is mainly based on a direct fiat conversion rate, they will probably suffer when the market declines too much as their only hope is their bitcon pool. Well, if bitcoin's price is too low, people might take advantage of it to play often if they will buy directly from the particular gambling site. I think the solution for this is to let people by bitcoins on exchanges, then push them to deposit the bitcoin directly to the gambling site. This will eliminate the fact that they will suffer because of direct fiat conversion of bitcoin from their site.

Or maybe, they might not need a huge bitcoin liquidity pool for this, just the prize pool for jackpots.

[peonminer]

Any site that offers a bonus to your deposit will have a "play through / rollover" requirement. It's a big ploy to get you to opt for the bonus. anywhere from 2x - 50x + playthrough of the bonus amount AFTER losing your initial investment is required. You will literally have to be one of the luckiest gamblers out there to actually be able to withdrawal your bonus. Some sites even require a higher play through for certain game types. IE. if you're going to play poker you'll only get 5% of your bet amount counted toward the rollover requirement vs. slots will get 100% roll over counted toward the wagering requirement.

[Meowth05]

They profit like any other gambling establishment do, they all profit base on how many people are players are gambling which means that guaranteed there are a lot of losers and a few as possible winners. Plus the investors, they are making sure that there is a supply fund to support the reward system.

[imstillthebest]

i dont see any gambling site will promise that your deposits will not fluctuate or they will offer fix rate in fiat value but all gambling site are using a crypto and not fiat means that you will get the exact amount of coins you depo minus the depositing fee from the wallet/exchange you use  .

also crypto gambling operators already know the risk or the unstableness of the coins just before they open up a casino  . they only allocate enough coins for casino use only

[criza]

i dont see any gambling site will promise that your deposits will not fluctuate or they will offer fix rate in fiat value but all gambling site are using a crypto and not fiat means that you will get the exact amount of coins you depo minus the depositing fee from the wallet/exchange you use  .

also crypto gambling operators already know the risk or the unstableness of the coins just before they open up a casino  . they only allocate enough coins for casino use only

Surely, as uncertain the standing of crypto currency that they use to support their casino, they have made plans to recuperate for it. Though, when we think about it, it is hard to manage such casino because, of the votality of the currency they are using. For me, its like they are also gambling when taking bets, because they don't know what will happen in the future or in the standing of crypto currency that they use in the casino.

As complex as it can be, surely they gain a lot from it, that's why they are able to continue.

[asu]

Also, kinda forgot how “ the house always win” too. I guess because I’m such an amazing gambler and never lose ( I wish ).  

A casino is a business model that is designed to ensure the casino a profitability, no matter how big or small. And it’s that edge that the casino always win in the end and makes their money in the long run.

House edge--no matter what games we play, the odds of the casino is always greater than our winning odds.

[The Cryptovator]

I had talked one of casino owner how they maintain their funds. According to him, he don't touch his bankroll even for promotion. Because he have to pay winner if his deposit funds not enough to pay. On the other hand they have some method for calculations weekly profits like how much deposited and how much withdrawn or won. Probably that's how they manage their portfolio. Regarding crypto they don't have to think much about price since deposit and withdrawal both is by bitcoin.

[ethereumhunter]

Let me make it simple. We can imagine that the owner doing buying and selling and then send the amount of each coin to the cold wallet. We never know how they do that, and I am sure they don't want to explain with details because that is part of their secret. But if the gambling website has large funds to run their website, then they will not just online for a long time, but they also have a big chance to make a profit. I am sure they will get the profit from the gamblers who lose their money so that they can make promotion to attract more people to gamble.

[leea-1334]

I had talked one of casino owner how they maintain their funds. According to him, he don't touch his bankroll even for promotion. Because he have to pay winner if his deposit funds not enough to pay. On the other hand they have some method for calculations weekly profits like how much deposited and how much withdrawn or won. Probably that's how they manage their portfolio. Regarding crypto they don't have to think much about price since deposit and withdrawal both is by bitcoin.

Well I would never touch bankroll for anything other than for bankroll. A good casino should have separate budgets for marketing, salaries and development, of course this can and should come out of profits, but not the original bankroll, which should be balanced every period after removing projected profits.

Everything should be done in one crypto though, but I understand that is why they cannot have big staff if they want to do everything in crypto because of salaries fixed in dollars.