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Author Topic: Bitcoin-based gambling to expand in 2013  (Read 1442 times)

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« on: January 04, 2013, 10:51:14 PM »
Bitcoin-based gambling to expand in 2013

Peer-to-peer currency could bring online poker back to the United States.
(Timothy B. Lee - Jan 4 2013, 5:45pm ESADT)

Last year, we wrote about Satoshi Dice, a Bitcoin-based online "slot machine." This month, at least one company hopes to introduce Bitcoin-based poker. The move could help to re-open online poker to American gamblers in the face of vigorous efforts by the US government to shut down online poker sites that serve Americans.

Online gambling has been illegal since 2006. But of course that hasn't stopped American Internet users from looking for ways to play on overseas websites. In recent years, the government has used a variety of tactics to crack down on overseas sites that cater to American customers.

A key vulnerability of offshore gambling sites is the need to get cash to and from American gamers. Until recently, the only practical way to do this was via traditional financial networks that are subject to regulation by the US government. Indeed, a ban on the use of credit cards for betting was a key provision of the 2006 online gambling ban.

But Bitcoin's peer-to-peer design and global reach effectively puts it beyond the reach of the feds. And its pseudonymous design gives online gambling sites plausible deniability: they might suspect that some of their users are based in the United States, but there's no practical way to verify the nationality of any specific Bitcoin depositor.

Businessweek reports that a Calgary company called Infiniti Poker is planning to accept Bitcoins for deposit when it opens for business later this month. Founder Michael Hajduk says his primary motivation is to speed up the payment process—Bitcoin payments can clear in a matter of hours rather than days or weeks—but he acknowledges another consequence is that it will also make it easier for American gamblers to play on his site.

“Because we’re using Bitcoin, we’re not using US banks—it’s all peer-to-peer,” Hajduk told Businessweek. “I don’t believe we’ll be doing anything wrong.”

If Bitcoin-based poker catches on, it could further increase demand for the cryptocurrency. During 2012, the market price of a Bitcoin rose from $4.75 to $13.50.

Disclosure: I own some bitcoins.
« Last Edit: January 04, 2013, 10:55:41 PM by »
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