Bitcoin worked its way into the online gambling world during 2016, though the shift went underreported at the time. While Bitcoin-specific gambling sites had existed for years, last year marked when m
Bitcoin worked its way into the online gambling world during 2016, though the shift went underreported at the time. While Bitcoin-specific gambling sites had existed for years, last year marked when major operators opened their doors to the digital currency. Bodog and 5dimes added Bitcoin alongside traditional payment methods for deposits and withdrawals. More significant, the affiliate networks that power the gambling industry began treating Bitcoin not as an exotic option but as a practical requirement.
Calvin Ayre, Bodog's founder, sees this trend accelerating. Near the end of 2016, he laid out his vision in a blog post. "Mark my words: Bitcoin is eventually going to eat the whole global online gambling industry and the first courses of this meal are already being digested," Ayre wrote. He went further, suggesting blockchain, the technology underlying Bitcoin, would render gaming regulators redundant. "Quite apart from liberating gambling sites from the anti-competitive dictates of government-imposed payment blocking, the blockchain technology underpinning Bitcoin is rapidly making the role of gaming regulators obsolete."
Ayre also advised operators to hold Bitcoin in reserve. "With its finite volume hardwired into the technology, Bitcoin is increasingly viewed as a safe haven more akin to gold than the highly speculative investment it once was, and operators who store their loot on the blockchain will find themselves with extra capital to fuel expansion plans," he wrote.
The list of sportsbooks accepting Bitcoin for deposits has grown. The UK Gambling Commission updated its License Conditions and Codes of Practice to formally recognize Bitcoin, though with a caveat: licensees must put safeguards in place to block money laundering through Bitcoin transactions.
Affiliate networks represent the more dramatic shift. These networks, which manage payouts to the people who refer players to gambling sites, have begun using Bitcoin to process commissions. Traditional banking made these transfers difficult and slow. Betting Partners and Winning Poker Network eliminated all other payout options for affiliates in 2016, pushing everyone onto Bitcoin. Commission.bz is making the same move. Both networks handle affiliate payouts for major brands like Bovada and BetOnline.
When Betting Partners announced the change, they highlighted what Bitcoin offered: payments settled in under an hour, no caps on transaction sizes, no identity verification needed, a $10 minimum payout threshold, and a new Bitcoin address for each transaction to shield privacy.
In their announcement, Winning Poker Network noted, "Bitcoin has fast become the most cost-effective and timely method of processing cash-outs for both players and affiliates."
Drake Affiliates took a softer approach, keeping other payment methods available but making Bitcoin attractive. Affiliates who chose Bitcoin in the first few months of the rollout received a 10 percent bonus over other methods.
For the gambling industry, Bitcoin has shifted from curiosity to necessity.
