How to reduce risk when gambling with bitcoin?

18 June, 2014

Sports gambling has rapidly become a big business in America. The National Gambling Impact Study Commission 1 reports that hundreds of millions are wagered annually on sports. Of that staggering amount, only a fraction is bet through legal books in the state of Nevada. This begs the question of where the remaining bets are placed?

The answer is quite simple. The internet. An increasing number of sites operated outside the jurisdiction of the United States have made it much easier for gamblers to enjoy their favorite pastime despite regulations. Now that bitcoin has also increased in popularity, there is an increasing number of sites offering gamblers the capability of wagering on sports bets using the virtual currency.

Although both online sports betting sites and sites offering the capability of making sports bets using bitcoin offer advantages, there are certain risks associated with online bets and particularly with the use of bitcoin. As reported by the LA Times back in 2011, two of the largest online poker sites were shut down by the U.S. Department of Justice. As part of that shutdown, more than $500 million in player deposits was seized. A settlement was eventually reached; however, customers were forced to wait over a year before they were able to claim reparations through the US Justice Department.

While the U.S. has had a tendency in the past to not be overtly strict in terms of enforcing anti-sports gambling laws, the potential is always present. Sports gambling sites remain popular. Bitcoin presents gamblers with a viable alternative to traditional online gambling. Compared to such traditional online betting sites, bitcoin sports gambling certainly offers many advantages. In most instances, players must make their way through an extensive process for transferring money between gambling sites. The process of depositing funds typically requires a credit card, which has its drawbacks. Making withdrawals can be even more challenging, with various sites instituting their own hurdles which players must jump through in order to withdraw their winnings.

Bitcoin sportsbooks, by comparison, offer a convenient alternative. Along with being much speedier, bitcoin is also a less expensive option. While there are obvious advantages associated with using bitcoin, there is also room for improvement. Sportsbetting sites that do take bitcoin are all non-regulated and non-licensed. The real risk comes with simply leaving winnings in bitcoins sitting on one of these sites. At any given time, a site could easily close shop. If that should happen, players have absolutely no recourse for getting their bitcoin back.

The world of bitcoin has often been referred to as the Wild West. This is very much true in many ways, particularly when it comes to bitcoin gambling. True, there are plenty of advantages, but it is important for players to ensure they are aware of the risks involved and take steps to mitigate those risks as much as possible. Perhaps the best benefit associated with bitcoin transfers is that it's almost instantaneous. There are no hurdles to jump through when it comes to deposits and withdrawals. By comparison, it can easily take days to complete withdrawals and deposits on regulated sites due to requirements that players must verify their ID by sending various documents. By using pure bitcoin sports gambling sites, there are no such issues. But, you still have the potential risk of losing your funds if there is ever a problem with the site.

While it might seem like a conundrum, there best way to reduce risk and still enjoy the benefits offered by using bitcoins for gambling is to transfer funds back and forth as needed rather than keeping bitcoins just sitting on the site.

Along with the potential for sites to shut down and funds to be lost, there is also another issue that presents serious risk and which has prevented bitcoin from being used more extensively for online sports gambling. That risk is price instability. Consider the following example: It is entirely possible that you could win a bet and yet still lose money in the event that the bitcoin market falls more than the edge on your wager before you convert your winnings into dollars. This is yet one more reason for transferring your funds back and forth on a regular basis.

As most gamblers are all too aware, one of the most important keys to success is ensuring that you are always in control of the amount of risk that you take. While gambling will always present a certain level of risk, making transfers instead of leaving your funds sitting on pure Bitcoin sites helps you to control that level of risk.


1) Internet Gambling.