Volatile Bitcoin an Unlikely Casino Bet, While Blockchain Promises Possible Payoffs
Posted on: March 12, 2019, 06:33h.
Last updated on: March 12, 2019, 06:33h.
Cryptocurrency gambling at US casinos — with digital currencies like Bitcoin — remains a long-shot, even though a new Rutgers University study found that more than 50 percent of active gamblers traded in cryptos in a recent year.
The research appearing in the journal Addictive Behaviors revealed that more than 75 percent of high-risk stock traders also trade in alternative currencies.
Devin Mills, a research associate at Rutgers’ Center for Gambling Studies, points out in a comment on the study that “trading cryptocurrency is … an investment opportunity” for some. “But there is an alarming proportion of people who are gambling on these cryptocurrency markets as they would gamble on horses or sports or slots. And it has the potential to get them into significant trouble.”
At the end of 2017, one bitcoin was trading for as high as $20,000, but has now dropped to under $4,000.
Not Coming to a Casino Near You
When asked to comment, Anthony Cabot — a Distinguished Fellow in Gaming Law at UNLV who formerly chaired the gaming law practice at Lewis Roca Rothgerber Christie — said using Bitcoin or other cryptos to gamble is “at best, a long way off.”
Cabot also pointed out that licensed, land-based casinos will not “seriously consider” using cryptocurrency until they become more “mainstream.”
Before agreeing to Bitcoin use in casinos, regulators will want to see “significant assurances … the casinos can identify the person [gambling] and source of the funds,” he told Casino.org.
This is especially a concern for anti-money laundering efforts, Cabot explained. But illegal online gambling sites may be more willing to ignore money laundering given the “anonymity” of cryptocurrency and its difficulties with being traced and regulated, he added.
No cryptocurrency casino gambling is currently allowed in any state or in any tribal gaming venue.
Ronnie Moas, the founder of Standpoint Research and an advocate for Bitcoin investing, told Casino.org it “makes you cringe when you hear the two of them [casinos and Bitcoin] in the same sentence.”
Bitcoin is associated with being clouded in secrecy and casinos historically have been seen as having ties with organized crime, he said.
“They did not meet in church,” Moas added.
I don’t see regulators really embracing [Bitcoin] yet or in the near future,” Jennifer Roberts, associate director at UNLV’s International Center for Gaming Regulation, told Casino.org. “There is still some hesitation because there has been some negative attention about cryptocurrencies, including its use in illegal activities.”
Roberts added there are a few Las Vegas casinos that have Bitcoin ATMs and accept cryptocurrency for non-gaming transactions, such as hotel expenses. For example, the D Casino in downtown Las Vegas offers a Bitcoin ATM on its casino floor, and it accepts Bitcoin for payments at its restaurants and the front desk.
The Golden Gate –also downtown — has let its guests pay with Bitcoin for rooms also.
Blockchain For Recordkeeping
When it comes to using blockchain for casino record-keeping, “it makes some sense,” Cabot said. Still, he wonders if it is even worth the “trouble of changing your systems and working through any necessary regulatory and internal control changes.”
Regulators will want to review the systems used to protect player data and accessibility, he explained.
Blockchain also has “significant potential” in gaming as a transactional ledger because of its “security and immutability,” Roberts said.
For instance, Moas says blockchain can track what dealers are doing without having security cameras pointed at them. Blockchain can also track the use of Bitcoin, and provides varied benefits for the gaming sector such as managing rewards, keeping compliance records, and storing and retrieving data, Roberts said.
Still, as of last October, the biggest growth markets for cryptocurrency were China, the rest of East Asia, and Eastern Europe, which interestingly were also seen as the biggest growth markets for gambling.
Blockchain Versus Bitcoin
Unless you’re a major cryptocurrency fan, chances are terms like “Bitcoin” and “blockchain” can start to blur. So what is the difference?
Bitcoin is a virtual currency and can be independent of blockchain. Blockchain is a transaction ledger. Among its security benefits is that data is encrypted immediately and has restricted accessibility.
“Blockchain … is decentralized in that it is not housed by one person’s server, but each person can access the identical document/transaction — and modifications cannot be made without each person having equal record of it,” Jennifer Roberts said. “It’s basically a cloudless cloud system.”