Bitcoin casinos report large profits

Bitcoin-based casinos are reporting pretty serious, six-figure profits on a series of games wherein players' apopheniac tendencies cause them to hallucinate non-randomness in the performance of a pseudorandom-number generator. The casinos claim that their financial numbers can be trusted because of BitCoin's shared logfile, which can be parsed to show their earnings.

SatoshiDice, which has servers based in Ireland, is a pseudo-random number generator game where players choose a number and then bet on the likelihood that a “rolled number” is greater than the one they’ve selected. If the rolled number is greater, then they win. The house has a 1.9 percent edge—which is where the profit comes in.

The online dice game has returned profits to the tune of ฿33,310 ($596,231) during 2012—an average actual profit of ฿135.96 ($2,416) per day from May through December 2012. During that period, players put down a total of 2,349,882 bets. That’s still minuscule by Las Vegas standards, but respectable.

bitZino, by contrast, released its figures in early January and seems to be doing a decent pace of business too (bitZino's bookkeeping only measures June 9 to December 31, 2012). The online casino—hosted in the US, offering online poker, blackjack, craps, and roulette—did not publish a profit and loss statement. bitZino did say it had paid out ฿28,986 ($495,000)—and that 3.2 million wagers were made during H2 2012.

Bitcoin-based casino rakes in more than $500,000 profit in six months

• [jandrese]

  Even by gambling “game” standards that SatoshiDice thing sounds boring.  I have to wonder how much of the gambling isn’t just money laundering in disguise? 

  • [Boundegar]

    Brick-and-mortar casinos are used for money laundering, because you can walk in with dirty cash and walk out with a nice clean check.  But I don’t see how you bring cash to an online casino.  Usually the money comes out the same way it went in – bank account or whatever.

    • [jandrese]

      This is bitcoins we are talking about.  Going through the casino to launder the money may be overkill, but it does put one step between your blockchain and the dirty money blockchain. 

      • [Jacob Henner]

        You start with bitcoins, you end up with bitcoins.  Either way they are untraceable, you might as well just turn your dirty money into bitcoins, then transfer them wherever, or to whoever.  No casino neccessary.

        • [First Last]

          Bitcoins as individual units are untraceable, but the actual protocol itself tracks every single transaction made so all law enforcement would have to do is trace your dirty money to the vendor who sold you your bitcoins, look down the log to see what address(es) you sent them to and then follow from there.

        • [Jim]

          > so all law enforcement would have to do is trace your dirty money to the vendor who sold you your bitcoins

          Good luck with that. LEOs would have to first prove that they can tie the bitcoin address to a real person. 

        • [Jason’s Robot]

          How do you ‘turn your dirty money into bitcoins’?  I mean like how does the bitcoin provider get your dirty-dollars?
          If the only way to do it is some kind of electronic transfer, well you have to put your cash in a bank or something for that.

          I know next-to-nothing about the bitcoin system so I’m not arguing with you.  I really don’t know.

    • [First Last]

      Bitcoin laundering is ridiculously simple. Basically you take your bitcoins and ‘invest’ them in something that has a holding account and a large number of users. Gambling is perfect since your other option is ponzi schemes.

      When you take your winnings you simply send them to a different wallet address than what you paid with – and now you have clean coins because the money going in and coming out is different amounts to different places and has been sitting in a wallet with thousands of other coins waiting to do the same thing.

      There’s no bank account involved at all until you exchange the bitcoins for real money.

      • [Jacob Henner]

        Interesting!  And further, it doesn’t seem like you even need to rely on “winnings”.  Just deposit the bitcoins to your casino account, wait a bit, then withdraw them to a seperate bitcoin wallet.  Don’t even play a single game.

        • [Dlo Burns]

           I’m sure an action that easy would be easy to flag and search for.

  • [Dr P Fenderson]

    It has better odds than almost anything you can find in a casino (1.9% house). Also, there are FAR easier ways to launder BTC without risking the 1.9%. I think that’s the draw. I mean, I don’t gamble, so I think it sounds boring too. But it seems that people are mostly excited about the money they win.

• [Jacob Henner]

  “a series of games wherein players’ apopheniac tendencies cause them to hallucinate non-randomness in the performance of a pseudorandom-number generator”

  Isn’t that a bit unfair to the poker players?  The house is basically just renting them tables to play against each other.  That is, of course, assuming that there is no house collusion or fraud.

• [Phil]

  Your ideas are intriguing to me and I wish to subscribe to your newsletter.

• [Sirkowski]

  Other than crazy survivalists and paranoid schizophrenics, who buys buttcoins?

  • [Dlo Burns]

     people bad at economics

  • [Jack Alderson]

    tech-savvy people who value monetary freedom and low-cost electronic transfers