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Bitcoin Gambling: An Overview of an Emerging Multimillion Dollar Industry

bitcoin gambling, credits shutterstock, BONNINSTUDIONo longer the domain of early Bitcoin adopters with web development backgrounds, Bitcoin gambling has exploded into a multimillion dollar online industry. Inhabiting the dicey space of opportunity between lagging legal frameworks and the unprecedented functionality the Bitcoin protocol enables for these platforms, online Bitcoin casinos are growing in numbers, total Bitcoin profits and Bitcoin turnover. On the 17th of July 2013 Erik Voorhees announced that the pioneering Bitcoin gambling site SatoshiDice had sold for the equivalent of $11.5 million USD in Bitcoin – to an unknown buyer. This was the first major acquisition of any Bitcoin company in history, but no doubt it will not be the last, especially in the online Bitcoin gambling space. Using the most up-to-date information available this article will explore in detail the current scale of the online Bitcoin gambling ecosystem.

 The recent growth in the online Bitcoin gambling space can be attributed to the widely acknowledged benefits for operators and players of using the Bitcoin protocol: transparency, provably fair gaming, semi anonymity, and the ease and speed with which customers can create accounts and begin placing bets. Due to Bitcoin’s accessible nature players from all over the globe can play, bypassing conventional banking structures and the rigorous ID requirements of traditional online sports gaming platforms. This low barrier of entry for both Bitcoin casino operators and gaming players in the online Bitcoin casino space is a large factor. Many platforms are also provably fair, making publicly available the details of their random number generator and their secret hash.

 Due to an unprecedented anonymous survey sent out to online Bitcoin casino operators worldwide in early August 2013, for the first time detailed facts and figures concerning the scale and scope of the Bitcoin gambling space have been revealed. Over 60 online Bitcoin gaming platforms were asked to contribute to the anonymous survey, with just 15 responding and completing the questionnaire. Regardless, from just these 15 respondents the most comprehensive overview of the state of the worldwide online Bitcoin gaming sphere to date has emerged.

 For the first time comprehensive figures regarding the average monthly Bitcoin profits generated by online Bitcoin casino platforms worldwide were made available. One-third, or 5 out of the 15 Bitcoin casinos reported a very modest profit of only 1 to 5 BTC per month. 4 out of the 15 respondents revealed that they were clearing much higher than average profits of between 101 to 250 Bitcoin; approximately $12,000 USD to $30,750 USD profit per month at current Mt.Gox prices at the time of writing. Two of the Bitcoin gaming operations surveyed were generating average monthly profits of between 1,000 and 5,000 Bitcoin: between approximately $122,000 USD and $610,000 USD. Although one-third of Bitcoin casinos reported average monthly earnings of less than 5 BTC, many operators in the industry are also reaping large rewards, the largest generating between approximately $122,000 USD and $610,000 USD per month. These profits indicate the growing liquidity and high profits which are available to operators in the online Bitcoin gaming space.

 A wide variation was also reported in the total profits of the Bitcoin casinos since the establishment of their respective gambling platforms. Four of the websites had a very low total Bitcoin profit since launch of between 1 and 5 BTC. However, the majority had experienced far greater profits; 5 platforms had recorded profits since launch of between 500 and 10,000 BTC, or approximately $61,000 USD to $1,220 000 USD. Since commencing operations the largest bitcoin casino SatoshiDice had achieved a total profit of over 51,000 BTC, roughly $6,220,000 USD at current Mt.Gox rates.

 Statistics regarding the average amount players deposit to Bitcoin gambling platforms around the world are also important to gain a thorough understanding of the health of the industry. Two-thirds of the 15 sites surveyed reported that their players deposited 0.1 to 1.5 Bitcoin on average into their online Bitcoin casino wallets. Two of the sites had average player deposit amounts of 5 to 10 or even more Bitcoin. It appears that while the vast majority of deposits are relatively small – in the order of $12 USD to $170 USD – the sheer volume of players leads to online Bitcoin gaming platforms realizing healthy profits.

 The largest Bitcoin casino surveyed had over 25,000 unique players who had deposited Bitcoin into their gambling wallets. Another Bitcoin gaming platform had between 15,000 and 25,000 depositing players, two casinos had between 3,000 and 5,000 players, while four of the gambling sites surveyed had between 750 to 1,000 players. While there is large variation in the concrete number of depositing players between sites, taken as an aggregate these statistics point to an industry consisting of many thousands of players worldwide.

 Taken from both the blockchain and the casinos themselves, specific statistics from the more prominent online Bitcoin gaming platforms have been made available. A number of big players have emerged in the online Bitcoin gaming space including: Bitcoin poker site sealswithclubs.eu, Bitcoin lotto platform Peerbet.org, roulette inspired Satoshicircle.com and popular online Bitcoin casino Bit777.com. Peerbet.org is a popular Bitcoin lotto platform servicing over 6,500 users. The platform has seen $650,000 USD turnover since it commenced operations and averages over 1,100 BTC or $130,000 USD turnover per month. In the four months since commencing operations, online Bitcoin casino platform Bit777.com – which offers over 50 different games – has processed close to 20,000 BTC or $2,500,000 USD in bets and has over 5,000 players as of early September 2013. SatoshiCircle.com, which is a playful take on Wheel of Fortune, currently has about 4,000 players and is steadily growing, with more than 10 million games played.

 Reflecting the growth which has increasingly been reported in the online Bitcoin gaming space, and perhaps the hopes of many operators to become the next SatoshiDice, the vast majority of online Bitcoin gambling platforms reported they have been running their operations for just under three months. This indicates that the industry is still in an early growth phase. As we have seen, the largest online Bitcoin gambling sites are raking in profits of up to $610,000 USD per month and serving up to 50,000 players. The unprecedented transparency, provably fair gaming, semi anonymity, and the ease with which customers can make bets in online Bitcoin casinos bode well for the future of the industry. The current period of high growth in the online Bitcoin gambling ecosystem might just be the precursor to Bitcoin becoming the industry standard in the worldwide online gambling industry generally.

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  • nathaniel wolfe

    It’s okay, we can say it. Billion. Emerging Multi-Billion Dollar Industry.

  • http://www.betchain.com/ BetChain

    Bitcoin gambling definitely has great potential