Gambling Online Using the Digital Currency Bitcoin

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Thursday, July 28th, 2016 | Written by Charles Washington

The Bitcoin was invented back in 2008 as a worldwide alternative to traditional currency, but when it was first developed it was rarely used for this purpose. During 2012 and 2013, however, Bitcoin began to gain popularity as people began looking for ways to make online purchases and send money to people in other countries without first having to use third-party payment programs, like PayPal. As more people found out about the speed of Bitcoin transactions, and how discreet and secure they could be, usage increased and more websites subsequently began accepting them. Today, you can purchase a variety of products and services online using Bitcoin, and it’s even possible to use Bitcoin for online gambling.

Obtaining Bitcoins

People who are interested in obtaining Bitcoins may choose to mine the currency themselves, but this requires a significant investment of money and time to purchase the necessary hardware as mining is a slow process. For the average gambler, it usually makes more sense to buy Bitcoins from a reputable site using a credit card, PayPal or wire transfer. It’s also possible to sell goods and services and accept Bitcoins as payment to get your hands on the currency. Many people choose to use Bitcoin wallet software programs or apps to manage Bitcoins and to send and receive payments.

Finding Bitcoin Casinos

Once you have obtained Bitcoins, the next step to gambling with them is to find a casino site that accepts the digital currency. Fortunately,there are an increasing number of online Bitcoin casinos out there, but it’s important to note that not all of these sites are reputable. Bitcoin by its very nature is a discreet way to pay, so there is a high risk of fraud associated with the currency, which is why it’s important to carefully research Bitcoin-friendly casinos before trying out of their online slot machines, or online poker games. A quick Google search can provide reviews for popular Bitcoin gambling sites, and you can also check to see where the site is based, and whether or not it is licensed to operate in its location. Typically, licensed sites will be more secure and reputable, but because licensing laws are very lax in some countries, this is not always the case.

Complying with the Law

Generally, if it’s legal to gamble online where you live, it’s also going to be legal to gamble using Bitcoin at a site licensed by your country. In the United States, however, the majority of online poker and online casino sites that accept Bitcoin are not licensed, even if you live in New Jersey, Nevada and Delaware where online gaming is legal. Penalties for playing on illegal poker sites vary from place to place, so it’s a good idea to know what the potential consequences are before you attempt to access an illegal site that accepts Bitcoin.

One prime example of the kind of trouble someone trying to operate a Bitcoin gambling site in the U.S. can encounter is provided by poker pro Bryan Micon, who launched a site called SealswithClubs, which he subsequently operated out of his home in Nevada. As he explained on Nevada Public Radio (NPR) at the time:

“We don’t have a bank account at Seals with Clubs. There’s no bank account. There’s no bank of any sort that we do. We only do this one weird brand-new Internet protocol transaction that some of the nerds out there are calling money.”

Nevertheless, it didn’t take long before he attracted the attention of the Nevada Gaming Commission (NGC), whose agents together with the local police subsequently arrested him, before shutting down his unlicensed operation. Despite facing a possible 10-year prison sentence, after pleading guilty in 2015 Micon fortunately escaped with 2 years probation and a $25,000 fine.

To show the inconsistencies associated with Bitcoins, a recent criminal case involving a Florida man was dismissed by Judge Teresa Mary Pooler, who concluded that although Michael Espinoza had been accused of using Bitcoins to “promote” credit-card fraud, the digital currency was not real money, and so he could not have been guilty of money laundering. As the judge explained:

“This court is not an expert in economics. However, it is very clear, even to someone with limited knowledge in the area, that bitcoin has a long way to go before it is equivalent of money. The Florida legislature may choose to adopt statutes regulating virtual currency in the future. At this time, however, attempting to fit the sale of bitcoin into a statutory scheme regulating money services business is like fitting a square peg in a round hole.”