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Bitcoin: What is it and How are Online Sportsbooks Using It?

April 20, 2014

You’re probably familiar with PayPal. You can use PayPal to purchase things online. PayPal is NOT a bank account, but is sort of an Internet bank. Bitcoin has some similarities to PayPal in that it is used to purchase things online. However, the Bitcoin system is far different than PayPal. And that’s a good thing for online gamblers because PayPal doesn’t process gambling deposits and withdraws for American players. Bitcoin, on the other hand, is often an asset to the online gambling community.

What is Bitcoin?

Bitcoin is, in Layman’s Terms, Internet money. You can use your Bitcoins to purchase goods and services online. In some cases, these Bitcoins can be used to fund and receive payouts from an online sportsbook. Bitcoin is not a bank and the money in your Bitcoin account are transferred into Bitcoins. So when you purchase something, you pay with Bitcoins as the form of currency, not actual US dollars.

Bitcoins are purchased online. When purchasing Bitcoins, you do not have to give your actual name and address. This is quite beneficial in the online sports betting community. Unlike PayPal, Bitcoins can be purchased anonymously. I’m not encouraging you to hide gambling winnings from the US government. However, it would be difficult for the Feds to trace your Bitcoin purchases.

Bitcoin Online Gambling

bitcoinBitcoin has made online gambling – especially in the United States – much more convenient. In fact, since Bitcoins aren’t technically US currency, gambling online with Bitcoins is legal. There are many online sportsbooks and casinos that cater to the Bitcoin crowd. Some of the sites now only accept Bitcoin depsoits. While the future of Bitcoin is uncertain, there is no doubt that Bitcoin has been a great asset to the online gambling community.

Not every online sportsbook accepts Bitcoins. Most don’t. But I expect the number of Bitcoin casinos to continually rise. It makes sense for online casinos to accept Bitcoins. There aren’t many ways for US citizens – and citizens of some other countries – to make deposits into an online casino because banks are not allowed to accept online gambling transactions. Bitcoins add another convenient way to gamble online that isn’t operated by a bank.

Should you trust the safety of Bitcoins? Yes. But there are no guarantees this form of currency will last. Will the system crash any time soon? Not a chance. However, it is possible that Bitcoin’s system could end up crashing eventually either because the phenomenon wears off or the website runs into legal issues. For now, yes, you can trust using Bitcoins to gamble online. It’s a smart way to fund your online sportsbook accounts because the transactions aren’t through a central bank.

The legality of gambling online with Bitcoin

Many question whether using Bitcoins makes gambling online legal in the United States. I’m not a lawyer so I won’t give you a straight answer on this. But I will say that my opinion is that since Bitcoins are not actual US currency, using them to gamble online should be legal. Technically, you are not gambling with money. You are gambling with non-government issued currency. In my opinion, that should make gambling online with Bitcoin completely legal. Thus far, the US government has been unable to regulate or prevent online gambling with Bitcoin for this very reason.