Sportsbook Scam: BitBook.biz

BitBook.biz is another example of the current problem with Bitcoin betting markets. The success and failure of new operators are probably around the same rate for their fiat-based counterparts, but since BTC gambling is so new in all forms, it’s been a treacherous arena for both operators and gamblers.

Few BTC sportsbooks have been in operation for over two years, meaning they’re still new to the market and relatively untrustworthy, just for that reason alone. There are some amazing positives to BTC sports betting, such as instant deposits, fast withdrawals and near-anonymity, but bettors need to exercise extreme caution when choosing a sportsbook.

BitBook was a heavily promoted sportsbook across a number of sites devoted to BTC gambling and sports betting. They were a favorite of many sports bettors for their excellent odds (they initially used Pinnacle’s prices) and high betting limits.

Their closure came out of nowhere.

Inception and Operation

BitBook began operations in March, 2013 as a product of Havelock Investments. Havelock is a private investment company licensed in Panama that specializes in Bitcoin investments. [1] They have about two dozen different companies and websites. Customers can buy shares in BTC in all of their companies and are paid a percentage of their profits.

They own several gambling sites related to BTC, including BitcoinRush, which is a highly rated BTC sportsbook and casino. According to their April 2014 numbers, CasinoBitco.in made around $50,000 in profit (around 30.0 BTC at current price) in just that month alone. This company is just one of their potential investments. They seem to be doing quite well across the board, but there are some failures as well, one being BitBook.biz.

BitBook was ambitious since the beginning. Firstly, they offered Pinnacle’s lines with -107 pricing and massive betting limits, uncommon for BTC sports betting markets. BitBook took up to 50.0 BTC on certain markets while most sportsbooks have substantially lower limits.

Even that’s an understatement. A high-end wagering limit at most BTC sportsbooks would be around 5.0 BTC, but most sportsbooks have limits at around two or three bitcoins.

It’s important for bettors to understand, and BitBook is a classic example of this, that just because a sportsbook has a large betting limit, it doesn’t necessarily mean they are most trustworthy or even financially sound. In fact, it can be a negative, especially if the shop is newer and is offering odds or bets that seem too good to be true.

BTC sports betting has reached some of the fiat-based market, but has yet to reach the masses on a large scale. Many shops can be wiped out if they get hit hard by sharp action. Professional level sports bettors realize the value of bitcoin betting markets and will hit books hard if they continually post soft lines. A hot streak from these guys or general mismanagement can put a sportsbook out of business in a matter of months.

BitBook’s site and interface were among the best around. Their deposits and withdrawals were both instant. They also stored the vast majority of player deposits offline in a cold wallet and used a third party hot wallet for daily transactions.

Everything was on the up and up, or so it seemed.

DDoS Attack

Less than a month before their abrupt closure, BitBook suffered a DDoS attack on February 27th, 2014 and were down for most of the day. [2] These attacks are quite common against online gambling sites, which overwhelm the site’s servers with requests. Hackers may ask for ransom and in some cases are hired by rival sportsbooks.

Anyway, BitBook came out of the attack with no glaring issues and management had mentioned that things were operating as usual days after the attack.

Shutdown

The company announced their closure on March 17th, 2014 with a message at BitBook.biz with this message posted on a blank homepage:

“We have decided to shut down BitBook.biz.

Although BitBook is shutting down, we are not running off with user funds. We ask that users submit their withdraw requests on the site. Since we will be moving funds out of cold storage to cover these withdraws please allow up to 48 hours for withdraws to be processed.

As of now we are no longer accepting new bets. Bets on events that have not started yet will be pushed to allow you to withdraw your full account balance.

We’d like to thank all our users and the entire bitcoin community for your support and patronage. It has been a pleasure to serve you.”

Well, at least BitBook had a plan to repay players, something that they did follow through on doing, at least partly. However, while many players were paid after the announcement was made; the site went blank just 10 days after announcing their closure and according to many players, went dark with all support emails and inquiries as well. [3]

Most high balance holders likely went through the process of getting their BTC back, but casual bettors who may not be not have heard the news may not have. Many players in the above thread fell into this situation, even ones with decent sized balances.

Allowing just 10 days as a window for withdrawals isn’t outright stealing, but it’s close. What about the player who goes on vacation and just simply doesn’t bet or follow news for two weeks? There are plenty of sites that players leave money at for more than two weeks and don’t bother to check back to see if the site is still operating.

This isn’t even remotely acceptable behavior. Players should not have to worry about losing all of their funds because they didn’t read the latest BTC gambling news or happen to not visit BitBook over a less than two week span. The owners ceased all contact after this window, despite knowing that many accounts still had bitcoins in them.

BitBook could have just as easily kept their site up for a month or longer, that’s if they cared about actually paying their players. They knew that their high-volume everyday bettors would request withdrawals, but had to know that their accounts with smaller amounts had a good chance of being left behind by players.

These small amounts added up to a considerable amount of money. Bitcoins that bettors had no recourse to get back after their disappearance and website closure. BitBook can act like they did the right thing here by not running off with the money (like so many defunct sportsbooks often do), but their plan for repayment was a deliberate one.
Management had a record of all the accounts with remaining BTC and knew that many had not requested their balances back, but still closed their doors. Not only that, they deleted their subsequent support emails.

Why Did BitBook Fail?

No one truly knows for sure, but their highly competitive odds and large betting limits are probably the reason. They were a favorite of sharps for a reason, because of their odds and 50.0 BTC betting limit. This is likely what ultimately did them in their final few months.

Management at BitBook can proclaim to the industry that they’re better than the shops who just ran off with player funds, but that’s only marginally true. Giving players less than two weeks to withdraw all their funds and then disappearing for good isn’t exactly the optimal way make sure bettors get paid.

[1] About Us Page – Havelock Investments
[2] Bitcoin sportsbook suffering DDoS attack – This Week in Gambling
[3] “Can’t Access my BitBook.biz Balance…” – BitcoinTalk Forums