How Safe is Gambling with Bitcoin

A question that is often asked when it comes to gambling with Bitcoin is how safe it is. Because of the massive amount of personal information most online casinos want about their players (like copies of ID’s, utility bills and other things), a lot of people feel a bit uncomfortable with getting involved. After all, it opens the doors to being tracked or having identities stolen, as well as kills any anonymity that would otherwise be experienced within the casinos. Luckily, Bitcoin helps alleviate this by opening the doors to a whole new way of gambling online in a way that is both safe and secure.

Bitcoin is Anonymous

One of the best things that Bitcoin brings to the table for those that do not want to give out their personal information is its anonymity. Any payments that are sent to players or from players are done without any information being broadcast other than their public wallet address, which is easily changed at any time (and is not linked to any identities, other than what players share on their own). This means payments can be both sent and received without knowing who the players are, and helps speed up the process since it means there is no verification process for deposits and withdrawals. On top of this, it allows for online gambling in jurisdictions where it is not allowed or where there are legal grey areas, since there is no way to know where players reside.

Bitcoin is Fast

When a Bitcoin transaction is sent, it is received by the other party pretty much immediately. There is no need to wait days or weeks (or, in some case, months) for the other party to get the funds, and there is no risk of them being confiscated in the middle of their transfer or otherwise denied. Once it is sent, the transaction is completed and finalized.

A side effect of the fast transactions is that it allows players to gamble in an online casino and withdraw their funds as soon as they are finished playing for the day. The funds can keep being sent back and forth daily so that the casino is not holding any of the money. This is one of the biggest perks of Bitcoin casinos, as the tiny withdrawal costs ($0.01 per cash out) enables players to deposit and withdraw multiple times per day into their own Btc Wallet rather than holding funds at the site. Players are essentially able to keep full control over everything they hold, rather than risking the casino shutting down while still holding it.

On top of this, the coins can be sent from anywhere. There are Bitcoin wallets and services for all major platforms of computers, cell phones and tablets, allowing for the transferring of money from anywhere at any time, as long as there is an active Internet connection.

Bitcoin Casinos Are Provably Fair

For the most part, Bitcoin casinos use a system called “provably fair”. This is used to help give proof that all results in the games are truly random, and the casino is not altering results to help themselves win more money (at the expense of the players). To help with this, most casinos offer up a special script for verifying their rolls, and players can run their own evaluations to ensure that everything is matching up as it should.

To help add another dynamic to the provably fair system, some casinos take it a step further and have client seeds that the players are able to alter. This adds even more assurance that the rolls are random, since the players themselves are able to have an impact on the results.

Bitcoin Has Cheap Transaction Fees

The cost of transacting with Bitcoin is very cheap, and in some cases absolutely free. This grants two major benefits when it comes to online gambling:

  • Players can keep transferring money to casinos and back without incurring massive fees, regardless of the transaction size
  • Players can utilize different wallets with each deposit or withdrawal they make, increasing the security and anonymity of their funds

Being able to transfer money cheap also allows for playing lower stakes in online casinos, lowering the risk of playing. Unlike traditional casinos where there may be deposit minimums of $25+ and withdrawal minimums of $50+ (which all depends on the casino, as each is different), with Bitcoin casinos there is usually a very low minimum for each, and sometimes none at all. With most of them, players can go in with $1 and leave with $2 with no problems, while still getting the same fun and enjoyment without the increased risk by depositing more money.

Choosing Reputable Sites

Because of the anonymous, irreversible nature of Bitcoin, choosing reputable sites to play on is important. Just like with any business, there have been some less-than-legitimate ones created, and avoiding them at all costs is a good idea. Luckily, there is Google, which helps give a way to research them.

The process to follow is to search for the site name + reviews, in the format like “Betcoin reviews.” This will pop up different sites and people’s experiences, which will help get a more holistic understanding as to how the site works and if they are paying out as they should. If there are a lot of people having problems with the site, it is better to avoid it than to take a risk. If there are very few reviews for a site, it is best to play it safe and risk smaller amounts of money there until confidence has been built up in the operation. While this still does not guarantee that the site is not going to disappear, by mixing the instant withdrawals (and keeping money off the site when not playing on it) and gut feelings, there is a much lower risk factor.

Conclusion

Bitcoin resolves a lot of the problems that surround gambling online. It allows players to gamble completely anonymously, allows for making deposits and withdrawals (of any size) quickly and easily, and opens the doors to provably fair gaming to ensure that the casino is not attempting to cheat players using rigged games. When it comes to gambling online, Bitcoin makes it safe, and it is the perfect compliment to any online casino.

8 Bitcoin Betting Scams and Lessons to Learn

Because of the anonymous nature of Bitcoin, scams can be hard to detect. There is no way of knowing who is running a certain site, unless the management publicly displays that information. Through the past, there have been some sportsbooks that have proven to be fronts to scams, or have gone under for other problems and caused their members to lose all of their funds. Here are some of the more notable ones, to help understand some of the processes used so they can be more easily detected.

StakeBTC

StakeBTC is a sportsbook that went offline in February of 2014 after being accused of scamming one of its players out of 46 BTC (which was around $26k at the time). The process of events is as follows:

  • The player had originally made a request to withdraw his entire balance
  • The site’s live help went offline
  • The player made a public notice on Bitcointalk’s forums to alert others as to the impending problem
  • StakeBTC makes a response approximately 45 minutes later claiming that the player’s balance was pending in three underdog wagers (which was a sign that he was probably going to lose it all)

After disputing this fact, StakeBTC claimed that the IP used to create the wagers was one of the two that the player had been using in the past, which the player denied.

Takeaway: Try to keep as few Bitcoins in your betting account as possible. With deposits and withdrawals costing nothing, it is a much better option to keep your coins in your wallet.

BTCSportsBet

BTCSportsBet was a Bitcoin sportsbook that had been around since 2011. There was a lot of publicity surrounding it, and it was once declared as being the best bitcoin bookmaker. At the end of 2013, however, things took a turn for the worst.

A player made a report about having 8 BTC (around $6.7k) in winning wagers on the site that were unpaid and that his account ended up being closed. The site responded to him by stating that they would pay his balance, minus the winnings from the wagers, due to “irregular betting patterns.” They did follow through on paying out the remaining 27.53 BTC (around $23k) to the player, but refused to comment on why they were not willing to go through with his latest winning wagers. When pressed for more information, their only statement was that they will not tell what happened, and that they are a trusted site that deals with thousands of Bitcoins a month.

Takeaway: Opt for sites that have active customer service reps and a history of dealing with customer complaints in an open and reasonable manner.

4SportsPicks

4SportsPicks was part of a family of other sites owned by the same people, including ForSportsPicks (a domain which 4SportsPicks started using later on), PlayersBigWorld, Playing24Hours, 444Sports and SportsPlayingWorld. All of these sportsbooks came with the same problems: they were deposit-only. What this means is that players could make deposits on to any of the sites and make wagers, but if anything was won it could not be withdrawn. The trick to this is that it created the illusion that the site was operating normally, until someone won money. For those who were losing on their wagers, there was nothing out of the ordinary to tip them off, so it was possible for them to continue playing while thinking that the sites were legitimate.

Takeaway: Research a site’s average withdrawal times before you deposit. There’s no point hitting a massive parlay if you will never see your winnings.

PalaceBet

PalaceBet came with a much different approach than most sportsbooks when it comes to scamming. This site used an elaborate scam that works as follows:

  • Fake handicappers refer players to PalaceBet
  • The player signs up at the site and sends his deposit
  • is balance is then instantly controlled by “pro handicappers,” who the customer service department of the site refer to as “the player’s sports advisers”
  • The bettor is promised a line of credit so he can place wagers on the handicappers’ picks
  • The bettor wires $4k from a bank to cover the transaction cost
  • The bettor then starts placing wagers on the advisers’ picks, which are designed to eat away at his finances. If he survives this, he is then told to wire another $4k to access his existing money (and winnings) and be able to withdraw everything

 

This entire setup seems fake just looking at it, so it’s a wonder how they were able to suck players in. With that said, there is an important lesson with this site: never send any site money in return for being able to withdraw what is yours. This is just a recipe for disaster, and is more than likely going to result in being scammed.

Takeaway: There are hundreds of sites out there peddling their tips and betting strategies. The truth is there are very few profitable handicappers out there and those that do make money will not be selling their tips when they can make much more money simply by betting them. Never pay for picks or let somebody claiming to be a pro bettor manage your bankroll.

BetCSI

BetCSI was sister site to another sportsbook, SelectWagering. These were responsible for doing cold-calling to get players interested in their site (with information pulled from other lists), and then attempting to get deposits. A big red flag with this site is that they offered up Paypal as a deposit method in spite of the fact that Paypal has disallowed gaming sites since 2002. The sites would not allow withdrawing of funds once they were deposited.

Takeaway:

  • If you are being cold-called about a new gambling site, you should be wary of it. Only visit the sites you personally have interest in.
  • If a site is offering deposit methods that are not even allowed by the processor, that is a hint that you should not trust them (if nothing else, the site could get shut down with your money still in it).

Betcas

Betcas is a professional looking site that allows deposits using many different methods. As soon as you visit them, they look just like what you want to be going after when it comes to choosing a Bitcoin betting site. The problem with this one? While you can deposit using Bitcoin, you can not withdraw it. There have been reports of players having their entire balance confiscated under the guise of “regulation,” but Betcas are not willing to go in to details as to what the regulation is or how it impacts the players. As a result, they can wipe accounts at any time and do not have to do anything to explain why it happened; simply creating a false story instead.

It is also worth noting that this sportsbook brings up another lesson. They claim to be run by the “Irish Gaming Commission,” but this does not exist. Even if it did, their claim does not necessarily represent the truth. Always evaluate the claims you are given before you accept them. Even if a gaming commission is real, you will still want to contact them to verify that the site is under their jurisdiction.

Takeaway: If a site claims to be regulated by a gambling commission check their list of licensees. All major gambling commissions maintain up to date lists of their license holders. If you cannot find one, email them and they will reply, though this process may take a few days.

Coinbet

Coinbet is a Bitcoin sportsbook that had a great reputation, although some members of the Bitcoin community were having problems with them. Despite many warnings given out, players continued to join the site and make deposits because it was known by the community and was trusted.

A user named Michael Katz was the first to start noting problems. He joined the site and started seeing that his rollover requirement (which has to be met in order to withdraw on the site) kept increasing with his bets. This was seen as a bug, where it should be going down, rather than up. As he continued to deal with support, he was told over and over that he would just have to play more in order to clear his rollover. He ended up throwing down millions of dollars, only to find that the site was still not working as planned. It ended up with the site offering him a resolution where he could choose one of these:

  • Get a refund of his last deposit of $6k, while losing the other $300k in his account
  • He could be a sportsbook consultant for the site and receive equity in it
  • He could keep trying to play through his rollover

 

He ended up deciding to publicize his experience with the site (along with copies of the support emails), after which he was threatened in that if he did so, his account would be closed (due to the terms of use being broken). He did this anyway, and shortly after the site closed.

Takeaway: This one seems obvious, but never trust a site that asks you to deposit more money in order to withdraw your funds. That is an extremely obvious tell tale sign of a scam and in 99.9999% of cases you will never see that money again.

Bitcoin Live Bets Goes Rogue

BitcoinLiveBets.com has gone rogue. After offering some of the best bets in BTC live betting markets and an impressive website and interface, Bitcoin Live Bets has disappeared and taken bettors’ bitcoins with them.

On July 12th, 2014 the site and betting interface was pulled offline, and the BitcoinLiveBets.com domain was a nearly blank white page. There was one short line of text reading: “Short maintenance work. Back in a few hours.”

The site never did come back online. Players not only lost their full balances stored at the site, but also lost any pending wagers. There is a massive thread at Bitcoin Talk Forums detailing the theft.

The owner(s) even had the audacity to sell off shares of the sportsbook a week before disappearing with their players’, and apparently investors,’ bitcoins. It’s unclear how much was lost by players in the Bitcoin Live Bets scam, but tens of thousands of USD in Bitcoin seems to be a modest estimate.

The rogue status of this previously well known BTC sportsbook is another reason for bettors to be extremely careful where they bet. Many sites have operated in good standing but runoff with players’ deposits since, especially since Bitcoin’s meteoritic rise in popularity in 2013-14.

If BitcoinLiveBets.com ever comes back online avoid it at all costs, along with any associated sites.

The main take away from this and pretty much every other Bitcoin gambling scam logged to date, is that users should never leave any coins at a sportsbook, casino or poker site. Deposit the exact amount you want to bet and leave the rest in the safety of your bitcoin storage device, regardless of whether that is online or offline; the simple fact is that’s where they are safest.

While many gambling sites are legitimate, they can still be hacked or lose alot of money to sharp bettors or software vulnerabilities. The only surefire way to protect yourself from this is by keeping your coins off-site at all times. Make your bets, cashout when they win and you won’t have any issues. For more on account safety, read my guide to using bitcoin betting sites here.