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UKGC to Allow Acceptance of Bitcoin Payments at Online Casinos

The United Kingdom Gambling Commission has made some changes to gambling regulations, making it possible for online casinos to now regard cryptocurrency as a cash equivalent.

This new amendment will come into force on October 31st of this year, and will apply only to online casinos operating in the UK market. The regulatory body has issued over 700 licenses to more than 400 online casinos this year. Understandably, bitcoin casinos in other regions might now consider the possibility of expanding to the UK market.

This move further strengthens the viability and potential of bitcoin in engaging players and creating more opportunities for gambling markets.

40% of bitcoin yield is already attributed to online gaming. There are more than 150 bitcoin casinos worldwide, and hundreds of websites that accept cryptocurrency as a method of payment apart from traditional options like credit and debit cards, cheques, and drafts. Bitcoins can be used as a betting currency or gaming chips and can encompass several games from blackjack to poker.

There are various advantages of bitcoins, such as the fact that it can be deposited and withdrawn instantly at online casinos. Bitcoins also offer the cheapest transaction fee in comparison to debit cards and even PayPal. As bitcoins allow players to make anonymous transactions, they are also highly appreciated by those people who do not want their bank or credit card statements to reflect gaming-related payments.

There are some online gaming platforms that already use bitcoins to fund loyalty programs, thereby encouraging players to further explore the use of digital currency for transactions. It is also expected that bitcoins will eventually become a standard payment option at casinos.

China and the UK have a pro-bitcoin stance, while France has been wary of them. In Cyprus, bitcoins are not illegal but neither are they regulated. According to bitcoin.com, the US, Canada, Denmark, Sweden, Estonia, the Netherlands, Finland, South Korea, Australia, and the UK are the most bitcoin-friendly countries in the world, in no particular order.

Bitcoin Jumps Back to $600 Price Range Amidst Yuan Devaluation Fears

It has been announced that Bitcoin has officially bounced back to the $600 price range; the highest price range that the digital currency has reached since the hack of Hong Kong-based bitcoin exchange Bitfinex in August.

During the hack, an estimated $65 million worth of bitcoin was stolen. Since then, the price of bitcoin has been hovering at about $570.

The digital currency’s sharp spike in price could have been influenced by several factors. For example, the renewed interest in cryptocurrency could have been caused by Bitfinex’s announcement that it has discovered a way for its customers to convert their BFX tokens. It could also be due to the fact that Russian authorities have finally admitted that a blanket ban on digital currency is “not worth implementing”, given that the technology is still evolving.

Another possible factor is the renewed fears of yuan devaluation among Chinese investors. The Chinese economy had a brief hopeful period in the days leading up to the G-20 summit. The optimism, however, was destroyed following the announcement by China and the US that they are refraining from competitive devaluations and not targeting exchange rates for competitive purposes.

This means that yuan will remain to drop in value against the US dollar, prompting numbers of investors to turn to digital currency to safeguard the value of their investments, acting as a safe haven asset, particularly at times like this.

Bitcoin’s price continued to rally at $604, with a market cap of nearly $9.71 billion and trade volume of $22.52 million.

UKGC Makes Bitcoin Payments Available to Online Licensees

The UK Gambling Commission (UKGC) has given online licensees the green light for digital currencies such as Bitcoin to be accepted payment methods.

Following a series of consultations with licensees and industry stakeholders, the UKGC released its updated License Conditions and Codes or Practice (LCCP); regulations which are set to take effect on October 31st 2016.

In the LCCP, Section 5.1 addresses “cash and cash equivalents, payment methods and services.” Licensees are told that they are to “implement appropriate policies and procedures concerning the usage of cash and cash equivalents by customers.” These cash and cash equivalents include bankers, drafts, cheques and debit cards, as well as digital currencies.

The intention behind this is to reduce the risk of money laundering activity and to “provide assurance that gambling activities are being conducted in a manner which promotes licensing objectives.”

Licensees were advised that they need to take into account any applicable learning or guidelines issued by the UKGC from time to time.

Quoting CEO Sarah Harrison, the UKGC’s annual report last month said that digital currencies were among the regulator’s areas of “continuing future focus”, but Harrison gave no specifics on what that might entail.

The acceptance of Bitcoin by UKGC, a high-profile body, could help to stimulate public acceptance of alternative currencies. The only jurisdiction to date that has allowed online gambling licensees free reign to accept the Bitcoin as payment is that of Curacao.

Momentum seems to be increasing, however, as in May, Isle of Man Gambling Supervision Commission proposed allowance of its online licensees to accept deposits made in “convertible virtual currencies.” The Malta Gaming Authority also reportedly held a meeting recently on this very subject.

A year ago, the UKGC wrote to emphasise that any Bitcoin gambling operators wishing to serve the UK market will still require a UK license. It also hinted at its upcoming policy adjustments by saying that the form of currency is “almost irrelevant”, as long as licensed operators could demonstrate that “crime is kept out of gambling and consumers are protected.”

Bitcoin Sportsbook Sees Strong Start to Euro16

Sportsbet.io, an online Bitcoin sportsbook operator, has enjoyed a good start to Euro 2016 following its launch earlier in June.

During the first two weeks of the tournament, the operator has seen its average daily stakes increase by over 20%. Among Bitcoin players, France has proven to be the most popular country to back, accounting for a total of 37% of Bitcoin bets, followed by England with 23% and Portugal with 17%.

More than half of all total bets placed on Sportsbet.io have come through the mobile channel, with 45% on smart-phones and 7% on tablet devices.

Having already handed out 36,000 mBTC (€22,000) worth of prizes via pre-signup raffles as well as daily draws, Sportsbet.io has shown to be quick in rewarding its users for their loyalty. Following a draw on the Sportsbet.io YouTube channel, one particular lucky user also won two tickets to the European Championship final, which will be taking place in Paris, with flights and accommodation included.

Points were awarded to users based on their winning group stage bets, with each 100 mBTC (€60) profit earning the player 100 points towards their total score. Another leaderboard challenge has been set up to reward the most successful punters during the knockout stages.

Joe Jordan, spokesperson at Sportsbet.io, said: “Our focus is to offer great odds and promotions, as demonstrated by our competition to win tickets to the Euro 2016 final, semi-final and free bitcoins. This summer’s European Championship action has been really exciting so far and there is still a lot more to come, both on the pitch and on Sportsbet.io.”

Bitcoin Hits 2-Year High Amid July’s Supply Shrink Forecast

Bitcoin has hit a two-year high, making its way past the $680 mark on Monday and hitting $689.87 with 15.65 million bitcoins in circulation. This is its highest since September 2014, when the cryptocurrency went on a free-fall from more than $1,000 per single bitcoin.

Concerned about their country’s economy resulting in the depression of the Yuan, the Chinese are still the main factor behind the unrelenting surge in the bitcoin price. According to CoinDesk; the world leader in news and digital currency, the increased investment among Chinese traders is believed to account for 95% of the current bitcoin trading volume.

The scheduled shrink in digital currency supply is another reason behind the spike. Chinese exchanges Huobi and OKCoin expect that in July, profits from mining bitcoins will be reduced due to a process called “halving”, which limits the total amount of bitcoins that could be created.

Created by Satoshi Nakamoto, the rules in bitcoin’s code dictate that 21 million coins will be released throughout the digital currency’s lifecycle, which is, in a way, aimed at counteracting the endless printing of paper currencies.

To this date, a total of 15.5 million bitcoins have already been created, and it can be safely assumed that, given the hype that digital currency is getting right now thanks to the increased attention from venture capitalists and banks on block-chain technology, there’s no way but up for the price of bitcoin.

Craig Wright confirmed as Bitcoin creator

Australian entrepreneur, inventor and scholar Dr. Craig Wright has confirmed his identity as Satoshi Nakomoto, the inventor of the Bitcoin alternative currency and blockchain technology.

Craig Wright

Dr. Craig Wright, the creator of Bitcoin

“I didn’t take the decision lightly to make my identity public”, says Wright. As he further comments, he couldn’t let the negative speculations spread on the media and affect the future of Bitcoin and the blockchain. Besides the statement, Wright created a blog to cut the speculations and explain how big the potential of the technology really is.

“No doubt that Craig Steven Wright is the person behind the Bitcoin technology, Nakamoto consensus and the Satoshi Nakamoto name”, comments Jon Matonis, director and founder of the Bitcoin Foundation. Wright gave Matonis a private proof session in the end of March.

Nowadays, Bitcoins are widely used as a payment method for many goods and services, including online gaming. It’s estimated, that 15.5 million bitcoins are now in circulation, being worth $449 each.

Bitcoins are now accepted as payment for a vast variety of goods and services – everything from international money transfers to ransoms for data encrypted by computer viruses. There are currently about 15.5 million bitcoins in circulation. Each one is worth about $449 (£306).

Undoubtedly, Bitcoin currency has had a deep impact on the igaming industry. SiGMA15 participants could learn about the technology by attending a panel “Security and payments risks of a gaming operation and the available solutions”, moderated by Marc Kenigsberg from Jamworx.

Japan Approves Bitcoin and Digital Currencies as Money

The Japanese Cabinet has officially approved a set of bills that will improve the integration of digital currency into the banking system through regulation, according to the Japan Times.

Bitcoin exchanges will be required, by Japanese regulations, to adopt established KYC/AML standards used in other nations. Banks will be able to enter the rapidly increasing “Fintech” industry for future asset management and gains. Other goals for 2016 include preventing new forms of money laundering through Bitcoin and maintaining protection for consumers.

Throughout 2012 and 2013, Mt. Gox, led by Mark Karpeles, was the world’s leading Bitcoin exchange. Mt. Gox collapsed in February of 2014 after rumours of mismanagement and fraud circulated for several months within the Bitcoin community. Various Japanese mainstream media outlets reported that Bitcoin collapsed with Mt. Gox, and they were locally associated with each other, leaving Bitcoin to suffer the consequences throughout 2014.

Over the past year, however, new and innovative changes were made, including Coincheck, which helped to gain over 1000 merchants and billions of Yen in consumer investment every month. The struggles of the Japanese economy may have been a factor in this national approval, as the country would not wish to potentially miss out on the economic gains brought in by the “Fintech” industry worldwide. As well as improving the business efficiency, these new bills will make it easier for banks to consolidate their fund and system management.

As a regulatory commission, Bitcoin exchanges like Coincheck will be required to register with the Financial Services Agency. Without the need for any conversions, payments can be made digitally, implying that banks and major corporations or utility providers will start accepting Bitcoins as a form of payment.

Marc Kenigsberg

Marc Kenigsberg is an advocate for cryptocurrency and one of the world’s leading Bitcoin affiliates. The founder of BitcoinChaser.com, and a firm believer in Bitcoin, Marc also operates various Bitcoin websites and projects.

Marc is a veteran of the gambling industry with 15 years experience in various marketing roles, including being responsible for marketing at some of the largest Playtech and Microgaming licensees.

He has spoken at numerous events in the past, Including the London Affiliate Show, Ice Totally Gaming, as well as the Bitcoin conference held last May in Prague. He also advised gaming operators and businesses on strategy and marketing activities.

Today Marc is also an affiliate in the financial space and operates industry leading financial portals including TradeOpus.com.

 

Patrick O’Brien: the role of bitcoin in online gaming

Gambling is a lucrative business, and online gaming represents a major and rising segment of that business – about 10% presently. H2 Gambling Capital, a firm that monitors the online gaming industry, estimated its global market value to be about $30 billion in 2012. In addition, the company projects the industry to realize a 9.13% compound annual growth rate all the way to 2015.

Therefore, the growing popularity of online gaming has necessitated the industry to reach further for more convenient and better payment systems. One such scheme that makes it easier for individuals to make more bets is the introduction of various crypto-currencies, of which Bitcoin has emerged as the favorite. Although this type of payment is faced with some hurdles, it has shown no signs of backing down from its revolutionary mission to enhance how things are done in the online casinos and gambling rooms.

Every country worldwide can be reached via the Bitcoin payment network and no other payment system can confidently boast of that. Coinometrics and others have approximated that about 40 per cent of Bitcoin network transaction volume is associated to payments for web-based gambling. Currently, more than 150 online casinos and gambling sites accept only Bitcoin as their preferred method of payment. Some of the leading Bitcoin gaming sites include Satoshi Dice, bitZino, and Seals with Clubs. And, the use of Bitcoin for online gambling is continuing to grow rapidly.

 

Patrick O'Brien, Director of Communications, EXANTE

Patrick O’Brien, Director of Communications, EXANTE

Placing bets on Bitcoin

There is increased interest in the use of Bitcoin in the iGaming industry because of its many advantages. Even though Bitcoin gambling currently represents a small percentage of the revenues from the iGaming industry, the stakeholders are burning their fingers to see that its use becomes more prevalent because of its many benefits.

The online gambling industry faces the following key challenges.

  • Inability to effect real-time payments in both directions
  • How to establish a payment system that is borderless
  • How to incur minimal fees for transactions
  • Difficulty in keeping client privacy beyond the gambling environment

Bitcoin, created in 2009, is a decentralized digital payment method employing peer-to-peer networking to allow irreversible transactions without involving any middle men. Bitcoin was developed as a reaction to centralized monetary authority, dwindling financial privacy, as well as paramount legacy infrastructure.  So, could it be the best bet for the iGaming industry?

 

 

Here are some key benefits that Bitcoin brings to the online gaming world.

  1. Very low fees

Bitcoin is regarded as a co-efficient type of crypto-currency. The major benefit arises from the cheap cost of effecting a Bitcoin transaction. Because it is relatively inexpensive to carry out a single transaction, an increased number of sports betting companies, online casinos, online poker rooms, online bingo sites, and others are placing their bets on Bitcoin as the preferred payment option. Bitcoin’s reasonable transaction prices also enable the industry players to offer low commissions and therefore attract more gamblers.

  1. Freedom in payment

Bitcoin is a revolutionary payment system that allows gamblers to make transactions without worrying about geographical constraints. With Bitcoin, online poker gamers can play anywhere in the world, at any time. Online casinos and gambling rooms do not need to worry about rescheduling for bank holidays or other limitations that may hamper convenient transactions.

Bitcoin enables people in countries not reached by the common payment methods such as Visa, MasterCard, and PayPal to engage in online gaming freely and safely. So, it is able to provide payment solutions to some places in the globe without banks or controlled by the traditional payment networks. Consequently, Bitcoin is proving to have the ability to open up the world’s extensive unregulated gambling markets.

  1. Quick payment

Contrary to the traditional payment methods that normally take hours or days for a transaction to be effected, Bitcoin transactions, however, are normally far faster. With Bitcoin, payments can be instantaneous making it possible for real-time gambling transactions to be made in both directions.

  1. Irreversible transactions

When customers make payments using credit cards or even bank payments, the sender normally can reverse or “chargeback” the payment. Therefore, this increases chances of fraud that can deteriorate the developments of the iGaming industry. Bitcoin is the only means of payment that the sender cannot be able to reverse the payments made.

  1. Discreet

One of the reasons why Bitcoin is increasingly getting the attention of the online gambling world is because its purchases are discrete. If a user does not want his or her personal information to be known, it will never be disclosed. More so, the purchases cannot be traced back to him or her. Furthermore, no third-party is able to interrupt Bitcoin transactions or enact freezes on Bitcoin accounts.

As much as the personal information is kept anonymous, all finalized transactions are available for everyone to see. Thus, this encourages information transparency. The public address of the sender will be visible without revealing his or her personal details. Additionally, anyone can verify transactions in the Bitcoin block chain to ascertain their authenticity. Since Bitcoin is built on a network that is cryptographically secure, any individual, entity, or government cannot manipulate its protocol.

Challenges facing Bitcoin

Although Bitcoin has been singled out as the innovation that will spread the wings of online gambling, a number of challenges still stand in the way of its complete adoption by the industry, and one would understand why. Here is a description of the key ones.

  1. Regulation

As the digital currency has started to penetrate into the mainstream and get exposure, several gaming companies have come under increased scrutiny from the cautious regulators. Regulation is good because it assists in taming some unfair practices in the market. Therefore, there needs to be a resolution of the issues that the regulators deem as risky for Bitcoin.

The regulatory framework in most countries imposes some expectations on the online gaming companies. Notably, a significant portion of the regulation raises issues with one of the most attractive benefits that Bitcoin offers to the online gaming world: anonymity.

Nonetheless, to find a solution to this issue, regulators can work hand in hand with firms that require individuals to disclose their identity before engaging in Bitcoin transactions. An example of such a firm is GoCoin, which mandates individuals to give out their identity when registering an account with them. Therefore, the risk of anonymity will be resolved if the iGaming industry accept crypto-currency payments only from players that have been identified using such platforms as provided by GoCoin.

Bitcoin regulation in the world varies substantially from country to country. Further, it is still undefined or changing in most of the countries. Whereas some countries have clearly authorized its use, others have completely outlawed or strictly forbidden it. In a majority of the developed countries, crypto-currencies are regulated under the money laundering/terrorist financing laws. Presently, Bitcoin has been publicly banned or severely restricted in only three nations: Bolivia, Ecuador, and Russia.

In spite of the regulatory policies, online gaming companies are doing their best to conform to the gambling laws and

Payments with Bitcoin

Payments with Bitcoin

make Bitcoin a preferred method of payment. A notable example is Vera&John, an online casino firm based in Malta, which caused a stir in the gaming industry by becoming the first licensed casino to accept Bitcoin in early 2014. However, things took a drastic turn after some few months when the firm announced that it will no longer be accepting Bitcoin payments. Vera&John were asked to suspend accepting the digital currency by its regulator, the Malta Gaming Authority, or risk having their license being revoked.

For the growth of Bitcoin in the gambling industry to continue, the stern watchful eyes of the several jurisdictions should not be a stumbling block. Therefore, for online gaming firms to thrive, they must be ready to endure and even compromise in some instances so that they establish lasting and profitable businesses. For example, they should be ready to adopt such platforms as provided by GoCoin to reduce the risk of anonymity in the industry.

The increasing popularity of Bitcoin as a preferred payment system seems, to date, unstoppable. Bitcoin and other crypto-currencies are likely here to stay. Just like electricity, this innovation cannot be un-invented. This calls for the online gaming world to rise above the occasion and sail the growth of the industry while soberly seeking for solutions for the issues raised by the regulators.

  1. Price volatility

The price of Bitcoin constantly fluctuates because there is a limited number of coins in circulation and the demand for them increases every day. As of March 20th 2015, one Bitcoin was valued at $263.20. It was valued at $312.44 on January 1st 2015. This constant fluctuation of the value of this novice “digital dollar” makes sense since people are still experimenting with it to understand how best it works. It is because of the volatility of Bitcoin that the regulators in the industry perceive it to be risky for investments. However, as more people and businesses start appreciating the benefits of Bitcoin, its price will eventually settle down.

  • Security issues

Another issue that thwarts the growth of Bitcoin in the iGaming industry is due to fears of security. However, it is very difficult for Bitcoin theft to take place, particularly if the digital coins are kept in a secured online wallet. In early 2012, Betco.in, an online poker site, was hacked leading to the loss of 2,900 Bitcoins from player balances. Since then, no hacker has been successful in stealing such a large number of Bitcoins from gaming platforms. Therefore, this shows that the iGaming industry has improved in terms of making its architecture secure for the participants.

The future with Bitcoin

Bitcoin will likely play a bigger role in the future of the online gambling industry. Bitcoin and other crypto-currencies continue to exert a firm foothold and will continue to shape its future. As more and more people begin to understand the concept of crypto-currencies, they will want to own their own digital coins that allow them to make fast and convenient payments while ensuring their purchases are secure.

As the popularity of Bitcoin increases around the world, individuals will get ways of making use of it just like fiat currencies. And, iGaming could just be another aspect this virtual currency is employing to legalize itself as a real unit of value. However, this amazing growth of Bitcoin is being incapacitated by some hurdles, which can be amicably solved so that people can continue to benefit from this innovation. Particularly, the issues raised by the regulators ought to be scrutinized carefully and major solutions developed. So, more dialogue between the various stakeholders, operators, suppliers, regulators, and the gamblers themselves is needed so that the bright future of the iGaming industry could be realized faster – with Bitcoin, of course.

Eric Benz

Eric Benz, Managing Director at Cryptopay, has been involved in the ‘payments technology sector’ for the best part of a decade and has delivered retail payment solutions for the world’s largest merchant brands transforming the way in which they sell and ship to their worldwide customers. Eric continues to lead innovative Pay-Tech solutions for the rapidly emerging digital currency and mobile wallet markets. His specialties lye in providing and integrating a wide range of merchant services in combination with accelerating brand and product development. Being at the forefront of mobile and alternative payments, Eric Benz prides himself for being constantly informed and engaged with merchants and payment service providers alike.

Eric’s expertise is vast in the European and emerging markets and has worked in many different places immersing himself with localized payment solutions for the under banked consumers who are living in low card penetration demographics. Whilst working in Russia, Eric was instrumental in establishing and scaling combined online/offline retail whilst pushing for rapid adoption of mobile app ecosystems.

Eric Benz received his Associate Arts Degree from Marymount College in Los Angeles and went on to receive his B.A. degree in International Business Management from the British American College in London (BACL).

Relive the highlights from our last show and stay tuned for this year’s SiGMA. Watch out for what we’re branding as the ‘iGaming Village’ this year.

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