There are two main types of gambling websites which use Bitcoin and other cryptocurrencies: those built specifically for crypto users, and those who just use it as another way to deposit/withdraw money. The first category is a little more niche, since it appeals direct to crypto holders. Their main marketing idea is that some people want to do something with their Bitcoins, and since there aren’t a lot of real life solutions at the moment, they can start gambling them. These websites usually don’t give the best odds for their games, since they have to rely on pretty large commissions for working with Bitcoin.
The second category are classic sportsbooks or online casinos which have chosen to allow the cryptocurrency trend. These operators range from simply allowing Bitcoin deposits and withdraws, without any bonuses or offers attached to them, to those who actively encourage customers to use cryptocurrencies as their main way of interacting financially with the broker. There are lots of models in between, of course. It all depends on the overall position that the gambling site has towards cryptocurrencies. We have to mention one more thing here: Bitcoin isn’t the only thing out there. Most brokers who accept Bitcoin also accept other digital coins, like Ethereum, Bitcoin Cash, Litecoin or Dash.
If you’re new to gambling with Bitcoin or aren’t exactly sure what the advantages and drawbacks are, here are a few things you should consider.
Advantages of Bitcoin Sportsbooks
- Anonimity. One of the biggest selling points of cryptocurrencies, in general, is the fact that their transactions cannot be traced back to humans. They’re made between wallets, which are essentially a virtual address composed of lots of numbers. There’s no way to track a transaction back to a person, unless they want this to happen! This leads to some good advantages for those of you who want to hide their betting activities – not for illicit reasons, but maybe your spouse doesn’t need to know absolutely everything.
- Tax advantages. In most parts of the world, laws around how to tax cryptocurrencies are still in their infancy. You might even get away with paying no tax at all on the profits you make, especially if you use more niche coins. We recommend being completely transparent with your income from betting with cryptocurrencies, if there is a clear legal requirement that you do so. If not, hey, more profits for you.
- Quickness of deposits. This isn’t a selling point compared to credit and debit cards, but should still be mentioned. Bitcoin transactions don’t happen instantly, but if you pay enough gas (and gambling companies usually do), they pass through in 1-2 hours – a lot quicker than bank transfers, for example.
- Long term investment. We don’t really mention the foreign exchange aspect of gambling a lot, since most of US readers are paid in US dollars, gamble in US dollars and withdraw profits in US dollars. Even if they would consider things like inflation or the dollar index, it still wouldn’t impact them a lot. This fact doesn’t apply to Bitcoin – in a bull market, you could also win from the appreciation of Bitcoin, which (as seen in the past) can be quite spectacular.
Disadvantages of Bitcoin Sportsbooks
All the above-mentioned advantages sound really good, but there are some less-ideal parts about Bitcoin gambling you should know about:
- Unstable market. The last upside can also be seen as a downside. If you catch your favorite cryptocurrency in a bear market, this might erase any winnings you get from gambling. You’ll receive cryptos from winning casino games or bets, but they’ll be worth a lot less.
- Security. Cryptocurrency transactions are a lot more secure than credit card ones, but people aren’t very knowledgeable about how to use crypto wallets. They end up storing things like private keys in all the wrong places. Additionally, we’ve seen companies a lot bigger than gambling websites (like exchanges) get hacked and get all their crypto funds stolen.
- Bad gambling conditions. This isn’t a generality, but as mentioned before in the article, some gambling companies which are more focused on the cryptocurrency aspect of the business often offer sub-par betting conditions. We’re used to seeing less-ideal odds and win percentages with gambling sites heavily involved with cryptocurrencies.
- Less ideal customer service. Since there are some technicalities to be understood when dealing with Bitcoin, customer service might not be so quick to solve issues as they are for standard deposits.
- Complicated software for first-timers. Cryptocurrencies like Bitcoin, Ethereum or Litecoin need some technical background to be fully understood. They don’t work like a credit card where you just put some number in and the money gets transferred. If you don’t already have experience in dealing with cryptos, you might want to skip using them to gamble entirely. If you do insist on learning, be prepared to spend a good couple of hours.
- Not suitable for small accounts. Although the number of transactions is growing day by day, crypto transactions are still fairly expensive. You’ll need to pay fees (in Bitcoin, for example) which amount to $10 or $20 for each transaction. If your account holds several Bitcoin, you won’t even feel them, but if you plan on creating an account with $50 or $100 worth of Bitcoin, it surely won’t be worth it – if the broker will even allow it.
That being said, we hope we provided enough information and details for you to be able to figure out if using cryptocurrencies in your gambling adventures is worth it or not. It will be a different story for everyone, of course, but we’re glad that US punters have another way of depositing and withdrawing funds.