Why gaming companies can’t afford NOT to take Bitcoin
With the introduction of Bitcoin in the world of payment, the gaming industry was to change forever as well. Some of the first Bitcoin websites were online betting portals, casinos and simple head and tails games.
The advantages of using Bitcoin involve its steadily growing status as a cost-efficient form of cryptocurrency. The main benefit focuses on the cost of making a Bitcoin transaction. Since it is relatively cheap to make a single transaction, more operators are exploring the idea of using them.
The most famous online gaming websites and the first to offer unregulated gaming is SatoshiDice. SatoshiDice launched in April 2012. As of January 2013, it had taken in approximately $15 million in bets. During 2012, SatoshiDice reported profits of over $500,000 in US dollars.
All this happened despite the website having no license, no link with traditional payment channels and no registration requirements for any and all players that wagered bets on their website. Bitcoin by construct allowed for a betting website of this nature to flourish.
Accepting Bitcoin is the next logical step
There are many reasons to accept Bitcoin as means of payment for gaming companies.
1. No chargebacks – By far the biggest headache for any online company accepting traditional credit and debit cards is the issue of chargebacks. Bitcoin by design does not allow for chargebacks.
2. Instant Payments - Bitcoin was built for the internet, so transactions are completed within seconds—rather than the typical 3-5 days. Accepting Bitcoin ensures money is irreversibly cleared and all payments are final.
3. Cheaper - Online casinos stand to increase profitability by cutting out the costs of dealing with traditional payment systems. Bitcoin is by default almost free, thus allowing third party payment gateways to offer far lower transaction fees.
4. The Bitcoin casino threat – The most important reason comes from new companies offering pure bit coin casino gaming, allowing for deposits, withdraws and playing almost instantly.
The amount of Bitcoin based casinos and betting portals is staggering. Since Bitcoin allows anyone with a computer and some knowledge of programming to setup a fully fledged online casino, the internet has recently been swamped in new casinos and betting sites, mostly unlicensed and unregulated.
The questions the regulated and established industry needs to ask itself is how long it can stand by idle and allow itself not to accept Bitcoin as a payment option. As Bitcoin grows as a payment method, with companies such as Microsoft, Expedia and Dell accepting and praising the currency, how long before it starts to erode the profits of those that do not accept the currency?
Accepting Bitcoin, getting traditional currency
A number of payment gateways offer Bitcoin payment options, among those are Coinbase, Bitpay and Bitcoinpaygate. What they all offer is the option to accept Bitcoin, online or offline, and get paid in EUR, USD, GBP or any other traditional national currency.
Bitcoin payments are instantly converted at the time of purchase, and transferred to the merchants bank account. This removes the risk of holding Bitcoin, and removes the need for gaming operators to focus on security for holding the cryptocurrency.
Offering Bitcoin payment options removes the risk of losing customer payment information as there is nothing to steal in a potential breach. There are no card numbers, no CVV codes, but only a log of incoming payment instructions that is worthless to any potential breach.
Bitcoin is becoming legal and accepted
Bitcoin is growing at a tremendeous speed, and in 2014 it exceeded expectation for acceptance and reach. For the first time ever, the Bitcoin ecosystem reached more than 100.000 transactions in a single day, with more than 100.000.000$ equivalent transferred.
Out of all transactions the gaming sector was supposedly 20% of all transactions conducted, with wagers on Bitcoin casino's beating any other sector.
In 2014 Bitcoin also became legal, with multiple countries and states allowing the currency to co-exist with traditional payment methods and currencies, as well as regulating companies and defining tax and VAT legislation.
Large corporations such as Microsoft, Dell Computers, Expedia and PayPal included Bitcoin as a payment option and in general spoke highly of it as a means of payment. And gaming regulators started tackling Bitcoin, with Isle of Man, Malta and Gibraltar starting to look at bridging the darling of payments with the established gaming industry.