How Does Bitcoin Affect Online Casinos?

The average man or woman in the streets had never even heard of Bitcoin about a year ago or more. However, today one sees crypto-currencies headlines daily in the popular press.

A part of this is probably attributed to recent events in Japan and the fact that Bitcoin prices have risen since the beginning of the year at a rate that has been unseen since 2013. At that time there was a dramatic rise that was then followed by an inglorious fall. Four years later, this sector has reached a stage of maturity, and many people are expecting the growth to be sustainable.

There are a whole variety of industries that are starting to take Bitcoin seriously as a method of payment and this will also serve to increase the profile, popularity and value of Bitcoin. The industry that stands to gain the most is the online gambling world.

With the number of online casinos accepting Bitcoin, a lot of new doors will open bringing greater opportunities for the casinos and gamblers who visit them.

Broad Customer Base

The biggest impact of the Bitcoin revolution is that it opens the doors to some new markets. The USA has always had a strong relationship with gambling. It is home to Las Vegas. However, many states don't allow casinos and gambling, and some of the strangest laws surround online gambling.

Simply put, the Unlawful Internet Gaming Enforcement Act states that the US banks are prohibited from processing any payments to gambling sites. It's important to distinguish here that it is not illegal for gamblers to pay money to a gambling site. However, it is unlawful for any US bank to process such a payment. This has led to US players looking for alternative methods of funding their casino accounts, such as Western Union money transfers and using prepaid debit cards, all of which have ultimately been blocked.

The authorities, however, are not able to control Bitcoin, and this looks to be the most promising option for USA, Russian and other countries that have limitations.

Tax Savings

A major draw of Bitcoin casinos is that all winnings are tax free for players. Most jurisdictions (such as in the USA) levy high taxes on both physical and online casinos, and the fact that all Bitcoin transactions are anonymous means that it is impossible to tax a player's winnings.

Better Payouts

At this stage the strength of Bitcoin against fiat currencies means that the potential gains are huge. And they are amplified further because Bitcoin casinos operate at a far lower house edge, and they can afford to do it because their overheads are so low. They can bring in sufficient revenue to be profitable through advertising, data sharing and by selling premium services.

The Future of Bitcoin Casinos?

With these advantages, one might think that the days of conventional casinos are numbered. But it must be noted that tax and payment loopholes won't necessarily last forever. Increased regulation is bound to be forthcoming when lawmakers work to catch up with the technology.