Isn't this bad news for Bitcoin?
In the short term possibly but dealing w/ poker rooms for deposits and withdraws is a total pain in the ass. Poker rooms make a good place to "launder" stolen credit cards so the checks and counter checks, and delays, and verifications requried to just put a dent into the billions of dollars a year in credit card fraud really suck.
Bitcoin "could" eliminate all that. If all deposits are via bitcoins and all withdraws are via bitcoin then the poker room is exposed to no fraud risk. Cashouts could be instantaneous.
Bitcoin doesn't solve the problem of fraud. It just protects the gambling site.
What if someone's stolen wallet is used to make the deposit?
What if the money launderer chooses to buy bitcoins with their stolen money and then make the deposit in bitcoins?
It isn't the job of a poker site to "solve" the concept of fraud. Poker sites are simply looking to reduce THEIR losses.
Player A uses stolen credit card to deposit $1000
Player A loses all his poker chips to Player B.
Player B withdraws $1000.
Stolen credit card user notifies bank who charges back poker room the $1000. They close account A but the money is gone.
Poker room loses $1000. Those losses contribute to Poker Room operating cost (and thus high rake).
The thieves aren't looking to play poker using stolen funds. They are using poker room to convert stolen credit cards into cash. Imagine the same process but with dozens of "winning player" accounts and hundreds of stolen cards. Very effective way to funnel hundreds of thousands of dollars off stolen credit card into cold hard cash.
If you lose your wallet the theif doesn't need poker room. They already have "cash" (equivalent).
If thief has cash he has no need to buy Bitcoins or make deposits in Bitcoins.
BTW Yes Bitcoin DOES (partially) solve the issue of fraud. There is no such thing as a fraudulent Bitcoin purchase. Your Bitcoins can be stolen but they can't be used fraudulently. There is no identity or ownership established with your Bitcoins. Possession is ownership. Much like if a thief takes $500 from your wallet he hasn't committed fraud he has committed theft. While you may find that distinction dubious there are real world implications.
Comparison of three crimes.
Thief steals $500 from your wallet.
Thief buys goods w/ stolen money. <- not a crime
Store suffers no loss and has no risk.
Thief steals your credit card.
Thief uses it to purchase $500 in goods. <-a secondary crime
Store or bank suffers the loss. <- responsible parties subsidize your inability to protect your own assets
Thief steals your Bitcoin wallet (w/ $500 equivalent)
Thief buys goods w/ stolen coins. <- not a crime
Store suffers no loss and has no risk.
