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Author Topic: Can bitcoin casino go bankrupt?  (Read 2430 times)
Eildosa
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August 02, 2015, 05:19:56 PM
 #1

Hi,

I was always told that regular casino games are rigged so that the casino never loses money.
If the bitcoin casinos are using real random number generation then it is possible for them to
actually go bankrupt no?

Thanks.
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August 02, 2015, 05:38:40 PM
 #2

I was always told that regular casino games are rigged so that the casino never loses money

If you mean the land casinos then it is most likely no since they need license to operate and the chances are pretty slim for them to rig their games because there will be always an inspection

If the bitcoin casinos are using real random number generation then it is possible for them to
actually go bankrupt no?

Yes but the chances are pretty slim , close to zero unless someone manage to know the server seed ( like hufflepuff did and drained the bankroll ) . Each game is equipped with house edge to ensure the house will always win in the long run and although the house is losing but if there is still people playing then you can be sure the house will recoup its loses

Not a bitcoin casinos but just an example of the house that is losing right now

http://dicesites.com/bitdiceme/clam

http://dicesites.com/peerbet/ppc

Both sites is "losing" currently but if you see the chart and compare you will see that the house is recouping its loses little by little so the probability to "bankrupt" will be close to nil ( hint : check the total profit chart )

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August 02, 2015, 05:44:11 PM
 #3

To add to the above.  You never really know how much bankroll the casino has (bitcoin casino that is).  This is because, you probably never know who the actual owners are, and they could literally tell you anything.  Just about anyone with programming knowledge could set up a little gambling game on a site fairly easily, so you get in the realm of people with a few thousand or even hundred who just wanted to try it out, thinking they would make a lot of money.

Well, in the short term, the casino can lose, and a few thousand can actually go pretty quickly, so yes, I would say that many bitcoin casinos could bust out pretty quick, as they don't have any institutional investors that are providing huge amounts of bankroll to bet against.


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August 02, 2015, 05:44:28 PM
 #4

Hi,

I was always told that regular casino games are rigged so that the casino never loses money.
If the bitcoin casinos are using real random number generation then it is possible for them to
actually go bankrupt no?

Thanks.

In legit casinos, the games are not rigged, the rules of games are designed for house, so houses don't need to cheat actually, from math aspect, casinos can profit in long term, so your claim is not accurate. But of course there are casinos cheat people, they are scam casinos.
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August 02, 2015, 05:46:38 PM
 #5

i dont think its possible that an online casino can go bankrupt
you cant see the dealer in an online casino so what is your guarantee that site is just stealing from your wallet

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August 02, 2015, 05:55:45 PM
 #6

i dont think its possible that an online casino can go bankrupt
you cant see the dealer in an online casino so what is your guarantee that site is just stealing from your wallet
well there is a provably fair system on most of the casinos that as far as i know cant be rigged, that means that casino owners do not steal money from players to keep it running and people loose money fairly

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August 02, 2015, 05:57:23 PM
 #7

I think they have thought about possibilities to go bankrupt before they make bitcoin casino, so they can avoid that. They have calculated how much they will get and lost. So, the possibility is pretty low.

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August 02, 2015, 05:59:25 PM
 #8

so your claim is not accurate.

Well , he is not claiming though much of like verifying

so yes, I would say that many bitcoin casinos could bust out pretty quick, as they don't have any institutional investors that are providing huge amounts of bankroll to bet against.

Huge amount of bankroll isnt the factor that decides if the BTC casinos could bankrupt or not because each a "proper" BTC casino follow the kelly criterion rules (mostly) . Even if a site has only 25 BTC as a bankroll, it doesnt matter unless the site put in a low kelly criterion like 0.5x or 1x of the edge .
This is to ensure that someone dont bust the house in an instance and without it, someone could bust the house in an instance even if the house got a huge bankroll ( assuming that guy is pretty lucky )

References of a dice sites that has 100BTC bankroll but allowed 20BTC max payout in one game

https://bitcointalk.org/index.php?topic=1064019.msg11606288#msg11606288

Turns out the the bankroll decreased by 30 % in less than 2 weeks

https://blockchain.info/address/1DUTgipJHFctU3UyWFavWmddRea7cAR5YK

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August 02, 2015, 06:37:28 PM
 #9

Of course they can. If they get super unlucky, get hacked, steal from the site, or any number of reasons.

It will be tough because they should have a lot less expenses than live casinos.

Casinos make money by putting the odds in their favor, they could get super unlucky, but it probably won't happen.

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August 02, 2015, 06:53:47 PM
 #10

i think casinos cant go bankrupt as they have such things as maximum bets that are allowed and provably fair systems that reduce the chance of getting hacked the only way to go bankrupt is to give away all money
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August 02, 2015, 07:00:21 PM
 #11

i think casinos cant go bankrupt as they have such things as maximum bets that are allowed and provably fair systems that reduce the chance of getting hacked the only way to go bankrupt is to give away all money

If you have very good security, a very trustworthy owner and a good maximum payout (see kelly betting) there is a super tiny chance the casino will go bankrupt.

I don't know the exact numbers but in general it's profitable without that much risk, especially when you have an invest option on the site, just collect fees and you don't even have to risk BTC yourself!

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August 02, 2015, 07:15:01 PM
 #12

If the bitcoin casinos are using real random number generation then it is possible for them to
actually go bankrupt no?

Yes. It is quite possible.

Yes but the chances are pretty slim , close to zero unless someone manage to know the server seed ( like hufflepuff did and drained the bankroll ) . Each game is equipped with house edge to ensure the house will always win in the long run and although the house is losing but if there is still people playing then you can be sure the house will recoup its loses

With an old gambling website that is likely to have a much larger bankroll, indeed the chances are pretty slim. This isn't the case with a newer gambling website, which is likely to have a much smaller bankroll. It is possible that variance could kill a newer gambling website.
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August 02, 2015, 07:38:33 PM
 #13

I have see one bitcoin casino (don't remember a name) with more slot with bonus, total up to 630 bitcoin, and if all player win in the same moment the bonus ?  Grin

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August 02, 2015, 08:04:15 PM
 #14

Also, real casino games are just as "rigged" as bitcoin casinos. The thing about casinos is they tell you exactly how the game is "rigged" before the game starts, and if you feel like it's worth doing, you play the game.

the casino's trick is that they make you feel like you have a 50/50 shot of winning a hand of blackjack, but in reality you don't.

That's exactly the same as when just dice offers you a payout of 2x when you roll under 49.5 instead of under 50.

Harrah's won't put the exact house edge on the table like just dice does, but it's very easy to find that information if you look hard enough (or calculate it if you are bored and/or in a statistics class). And it doesn't take an advanced degree to look at a roulette wheel and see 18 red numbers, 18 black numbers, and 1 or 2 green numbers and figure out that an even money payout on red or black is "rigged."

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August 02, 2015, 08:09:58 PM
 #15

I have see one bitcoin casino (don't remember a name) with more slot with bonus, total up to 630 bitcoin, and if all player win in the same moment the bonus ?  Grin
i doubt that slots offer the jackpot of all funds they have as it would mean the bankrupt, most probably they either dont have those funds or its not all they have

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August 02, 2015, 08:24:20 PM
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They can always go bankcrupt but they have measures like max bet in play which lowers their chance of going negative. Most of the casinos have this max bet set at a percentage of their total bankroll.

So if a gambler keeps winning , then the max win keeps on decreasing. No gambler ever will win by simply flat betting as he will have to get lucky for long to defeat the house edge, They will mostly employ strategies like martingale and in short lucky runs they might profit big. But having the max bet would break into their strategies and gives the casinos another big house edge.

That said there have been investment based casinos which have gone negative in profit, but if they have the bankroll to continue, then they will likely come back. For shorterm it can always happen.
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August 02, 2015, 08:30:06 PM
 #17

With an old gambling website that is likely to have a much larger bankroll, indeed the chances are pretty slim. This isn't the case with a newer gambling website, which is likely to have a much smaller bankroll. It is possible that variance could kill a newer gambling website.

AFAIK there will be only two conditions to not be "killed"

#1.  Use a proper kelly criterion ( posted in few post above )
#2.  Wagered volume.

Unless the house could secure a good betting volume constantly then the site will live even if is suffering on loss ( some new site has a good volume ). The sad thing is that just most people here tend to not give the new site a "chance" although some newer sites tend to be "better" apart from the trustworthyness ofc

the casino's trick is that they make you feel like you have a 50/50 shot of winning a hand of blackjack, but in reality you don't.

Right on the nail !

-snip- if -snip-

There isnt any need of the "IF" words there especially with something that highly unlikely going to happen and this will be just derailing the topic

That said there have been investment based casinos which have gone negative in profit, but if they have the bankroll to continue, then they will likely come back. For shorterm it can always happen.

Wrong, if the profit is going negative then the site needs more people to play and "LOSE" to recover which is what happen to most gambler. That is how the site will recover but if the site going negative and there isnt anyone playing and "losing" ofc then things will be on its opposite

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August 02, 2015, 09:04:00 PM
 #18

Of course they can go bankrupt. Bankrupt just means unable to pay the winnings or other creditors. That could be as simple as the company hosting their servers. If they are unable to pay either winners or creditors as a company they would have to declare bankruptcy.
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August 02, 2015, 09:22:25 PM
 #19

Hi,

I was always told that regular casino games are rigged so that the casino never loses money.
If the bitcoin casinos are using real random number generation then it is possible for them to
actually go bankrupt no?

Thanks.

Its possible if a very higher roller bets big and the casino gets very unlucky they could go broke.  Most casinos limit the maximum bet to make it mathmaticaly very hard for this to happen.  
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August 02, 2015, 10:55:44 PM
 #20

Yes, if all players are actually end up always winning and less losing then yes, they are going to lose their biz.

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