2012 Year in Review – Top 10 Gambling Related Stories (Part 1)
Hartley Henderson
2012-12-20
http://www.osga.com/artman/publish/article_10661.shtml...
4. New Virtual Currency for Wagering:
Since the passing of the UIGEA and the difficulty getting payments to and from offshore gambling sites, many in the industry believed that the only real solution for U.S. facing gambling sites would be for the offshore sites to coordinate their own type of banking system or use a currency that can't be seized by the DoJ. In 2012 that currency became a reality for some offshore sites. Bitcoin has been around for a few years but the complexity of how the system works and the huge fluctuations in valuation have made it unfeasible for most. Last year Switch Poker decided to offer Bitcoin as a payment option and numerous bitcoin only sportsbooks, poker rooms, bingo sites and casinos became quite large and profitable. Seals with Clubs, Strike Sapphire and BC Casino had revenues that were as large as many offshore casinos and poker rooms and Satoshi Dice, which only launched in April of 2012 has processed over $15 million in bets, averaging over $50,000 a day in wagers and the projections just soar from there. There are indeed some limitations to bitcoin, but the currency can be bought and sold like any other currency and all transactions are open source and are verified by bitcoin users making it impossible for customers to contend they didn't actually place a wager. Consequently charge backs don't happen. Most importantly all bitcoin transactions are anonymous so it would be impossible for the DoJ to determine if a transaction has taken place in the United States, Europe or even Antarctica. Winnings are always paid back in bitcoin from the casinos and the customers have to use one of many bitcoin currency exchanges to sell it back for real American dollars. Consequently the banks can't block the transactions under the UIGEA because payments don't come directly from an offshore gambling establishment but rather from a bitcoin trader. And using a currency exchange isn't illegal under the UIGEA or any other American law. For that reason after my article was written about bitcoin on OSGA.com, numerous U.S. facing offshore operators sent emails asking for more information on the currency and ways that they could incorporate it as a payment method into their existing sportsbooks, casinos or poker rooms.
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