Topic: Are bitcoins casinos really pointless? - page 3. (Read 8468 times)

That's a very good point that I had overlooked (as I'm generally not an online gambling player, ... primarily for the reason you cited ... I try to avoid negative EV   ).

This was illustrated in another thread where bitcoin gaming is sometimes used as a way to get a "bridge loan".  The example given was where someone wants to make a purchase but is just a little short of funds.  It will take a few days either to get more funds or for an existing funds transfer to complete in order to buy more coins.  So using one of the bitcoin gaming services a person can make a wager (or two) and likely win the amount that was needed.

In the worst case scenario the person loses and has to wait a few days for a funds transfer to complete, just like they would have been had they not placed the bets.

Of course for a person in financial distress, this can accelerate a downward spiral but for those simply wanting a few more coins quickly, the immediate access to winnings is something Bitcoin gaming offers that is not found anywhere else online.

You also have consider the time that some of those companies were started, I mean at the time they were innovated, bitcoins was still new and not popular and took balls. I also don't think bitcoin casinos are pointless, just everyone and their mothers has one, and some are really beautiful. I just feel these talented people should be focus on something greater. I can agree with you on centralized exchange/trading service/investment scheme LOL

In terms of sunk costs and infrastructure, our casino (StrikeSapphire) was far and away the costliest and most complex casino -- or website of any kind -- ever deployed to cater to the Bitcoin market. Bitzino is a good HTML5 app but is nowhere near our level of sophistication in terms of multiplayer tables, multiple game windows, variety of games, etc. They do very well at their core competency, and I have nothing but respect for them. I have no idea whether they've recouped their costs already. But I think I'm qualified to comment on this, and I can lay out a couple of reasons why I think Calvin is interested in Bitcoin and why it's not correct to say that bitcoin casinos are pointless; and also explain why Bodog will not be adopting Bitcoin anytime soon.

For the average casino player: First of all, hashing methods for proving fairness are not actually the biggest advancement brought by Bitcoin. Strictly speaking they are not actually Bitcoin-related at all. They can be, if they're tied to the block chain; but the way Bitzino implements them is essentially the same as a GNU-licensed casino system devised under the name Fairdice back in 2004. While it's a great feature for paranoid libertarian Bitcoin types, those are not people who bring profits to a casino. In case you're wondering why no mainstream casino has ever implemented Fairdice or another "provably fair" hashing scheme -- first of all, it doesn't work in a multiplayer environment, and secondly online casinos just don't make their money from geeks. If you understand math well enough to figure out how to check that hash, you also understand it well enough to understand house edge and stay away from slot machines. It's accurate to say that the people who understand hashing schemes are not going to blow their retirement on an online casino, and another reason that's accurate is that they don't have any retirement to begin with; they're almost all under the age of 40 which is not the prime demographic for online casinos. This is the biggest problem for online casinos operating in the Bitcoin space; Bitcoiners are too young / too tech savvy to be the kind of gamblers that online casinos want.

However Bitcoin does offer one thing to the average online gambler - I mean the 40-65, gainfully employed, top-10%-net-earner who spends a few hundred to a few thousand a month on online entertainment. What it offers is immediacy. Bitcoiners who aren't habitual online gamblers in mainstream casinos take instant transactions for granted, but this is far from the norm in the e-gaming world. Most online gamblers are completely resigned to waiting at least a week for their withdrawals, and usually longer. This is an advantage that's easily understood by the mainstream audience and is probably the best selling point for Bitcoin casinos as they attempt to compete with mainstream ones. Unfortunately, the average player just says, "Bit-what?" and that's about as far as we've gotten.

For the casino: The benefits are numerous. The overhead is extremely low if you're trying to do something at a small scale. A real gaming license from Malta, the UK, Isle of Man, Antigua or Kahnawake will run around $250k when all is said and done, and all the lawyers are paid. That can secure you a (low) 4-5% credit card processing fee in and out, if you're willing to float at least $50k + 10% rolling with the card company. A cheaper gaming license may mean you're paying anywhere up to 9% to the card companies. Obviously Bitcoin lowers the bar to entry by about half a million dollars, and if you're willing to put even a fraction of that into decent software development you can put together a fairly good site. For large, existing casinos, the advantage would simply be lower fees. However, the drawbacks for big players like Bodog are also apparent. As stated above, the Bitcoin player doesn't match the average demographic for high rollers or the people who keep a casino in business. The fact that transactions are so rapid means that deposits also tend to be smaller, which means play periods are shorter, which means less churn for the house. Less churn means less drop.

Ultimately, in my opinion after doing this for about 14 months, it's a wash. The lower overhead is great, but the revenue is far lower than we would see from mainstream processing methods. Despite services like Bitinstant, there is still a severe psychological and technical barrier to buying Bitcoins for the less technically savvy 40-65 year old audience, who are naturally an online casino's core market. Until or unless that barrier goes away, Bitcoin casinos will remain small players and Bitcoin will probably not be adopted by Bodog or other mainstream outfits.

sometimes even execution doesn't pay off: http://www.bitmit.net/en/trade/i/8969-bitcoin-gambling-website-bitcoin-roulette-com

Why is BTC gambling any more pointless than gambling in general?

In any event, it sure beats the Ponzi scams, ripoffs and swindles that seem to typify a large part of BTC commerce at present.  (At least to the extent there are legitimate gambling sites although a fair number of these also turn out to be swindles.)

Not at all, good points have been made why they aren't pointless. Btw, sometimes I enjoy betting my bitcoins for fun and hope for profit.

The plan is more innovation, and while yes I am working on ideas that is only thing I can do.

Also SR didn't move anything forward maybe how to hide from the police, they just gave a better expose to bitcoins. Companies like bitvps, bitinstant, reddit (when they accept bitcoins), Slush, operation fabulous. All these companies have moved bitcoins forward at their time, but most of these companies are old and yes 2 yrs in internet time is like 40yrs. We need innovation and quickly otherwise we could lose interest from people coming to bitcoins recently.

By that you mean infrastructure? Still one depend on the other and without the people who use said infrastructure they mean nothing. Added to that I don't think that either of those who you brought up are particularly innovative, if you are aming at projects which could that what they are supposed to do better I'm all ear though.

A Bitcoin Casino is far from pointless still, what's really pointless is yet another centralized exchange/trading service/investment scheme but on that I think we'll agree.

So do you have a plan on what to do in this instance? How to make it something that moves bitcoin forward.

I agree that a gambling site is not something world changing or profound but you cannot reasonably expect for every project using bitcoin to have this property. It's a small step, but no matter how small it's a step in the right direction.
And to be honest, besides SR I don't know of anything else which would be considered a game-changer, and that is more to be attributed to tor than bitcoin.

Ideas are a dime a dozen; execution is what matters.  I agree with you that we seem to be hitting a plateau I would just point out that things like well built gaming sites is what got us TO this plateau.  Going higher will require more and more and more innovation.

Two words: House edge.

No, sorry.  Four words.  Add two more: Provably Fair.

Most state-operated lotteries pay out in the range of 70% or less of the lotto ticket/wager revenue.   I don't know the actual number for a fact, but most of these state run lotteries are audited and when you dig you can find their reported results for each jurisdiction.  If you believe they aren't cheating and can trust the audited numbers, you'll probably end up with a number in the 70% range.

BitLotto pays out 99%.   I do know this number to be a fact as I see the blockchain and know exactly how many tickets were purchased.  I can perform the calculation to independently determine the winner, and I see the payout transaction.  Thus I can conclude that player returns when playing BitLotto are 41% higher than when playing MegaMillions (99% versus 70%).
 - http://www.BitLotto.com

SatoshiDICE has a 98.1% payout (before considering transaction fees) which means they keep the 1.9% house edge.  Today I can go through the blockchain and verify that every single wager ever made to SatoshiDICE (ever, like all the way back to their April launch) was calculated correctly and paid out correctly.   I can prove that SatoshiDICE is operating fairly.

In Vegas casinos, the most widely used gambling options (e.g., slot machines) might return maybe 96%, and most are in the 94% or 92% range.   Someone needs to pay for the security cameras, fake volcanoes and free booze.  They only way for a physical casino to function profitably with better odds is likely to cheat somewhere.  (Or so I've read.  I don't gamble much and am not tuned in to the casino industry )

The only reason SatoshiDICE isn't paying out 99% is because they aren't being squeezed by a more aggressive competitor offering a 98.9% payout.   That day will come.  Because with an increase in play, both SatoshiDICE and some other competitor(s) can still operate profitably on a lower house advantage without cheating (which isn't really an option as it would be exposed them and they'ld lose all credibility in a matter of days.)

bitZino doesn't publish the odds to each of their games, I don't believe.  But the odds can be calculated.  For blackjack most of the rule variations are ones that favor the player:
 - http://wizardofodds.com/games/blackjack/rule-variations
 - http://www.bitZino.com

So I can't say that bitZino games (blackjack, video poker, craps and roulette) have  payouts that are higher than a Vegas casino has because I haven't seen the odds (or performed the computations myself) but I would bet that bitZino can always beat Vegas casinos due to having such low costs, on a relative basis.   (Unlike bitLotto and SatoshiDICE, we don't know bitZino's revenues or profits.  I'm going to conclude they are still nowhere near recovering their investment for development but like D&T mentions, they probably didn't build all that intending to profit in 2012 but instead did all that beautiful HTML5 and rock solid back-end work for the returns they could see in 2014 or later, which could be substantial.)

Another provably fair game I'm enthusiastic about is King Coin.  The odds for that were just calculated (thanks dooglus) to be in the 96% range.  That makes me less enthusiastic about the game than I was originally, but again, those odds can be increased (which can be verified independently) and hopefully this entertaining visual game can join the stable of online gaming where provably fair gaming using Bitcoins beats any other online gaming options.

And that's what the owner of Bodog either doesn't realize (which I doubt) or wishes to not tout until he figures out a way to make some money from it.  He's welcome to try.  The barrier to entry for building an online casino game is not beyond what a skilled developer operating solo as as "nights and weekends" project can produce.  But with it being provably fair, math gives that alternative the same credibility as what gamers used to count on ...  the polished look and feel that established gaming companies provide.

There's a huge industry that has no idea that they are going to be sharing part of their lunch:
 - http://www.bulletbusiness.com/mobilegambling/index.php

Something more than just a gambling site, something that moves bitcoin forward.


It doesn't push it forward, it only exposes people to bitcoins which is good. Something that pushes forward would be a site that takes it to that next level. Right now if you noticed the community is kinda stagnate, not a lot of innovation. I haven't seen a site around that makes me go "WOW these people are really changing the game" in a while. I just feel like gambling has been done, over and over. Clearly those people just want profits, I mean who can't throw up a gambling site, look at the person that took satoshi dice and just made every game in the book. It is just getting to a point where the gambling is just becoming annoying. 

Of course it pushes forward.  It is a service; entertainment.  It is a form of entertainment which can be paid in Bitcoins.  Just because it is a service you don't see value in it, the global transaction volume for "gaming" indicates there is a demand.  More places to spend bitcoins can only be bullish.

Bitcoin casinos are one of the few things I actually consider beneficial and a good use of bitcoin. I wouldn't dare to play in one, but if it comes to it run one

I don't see your point.
What would you consider a worthwhile endeavour in contrast?

I think bitcoin casinos and gambling is pointless, I know there is market for that and I respect that. I have also seen some great sites that they have created in the bitcoin gambling community, and been like why don't they put there energy into a project that would push bitcoin forward. A casino pushes forward nor back, it is just mere profits.

It depends.  If Bitcoin never gets any bigger essentially no bitcoin buisiness is worth it.   None.  Not even MtGox.  However nobody putting money and labor into a bitcoin enterprise is doing it for the small sums they will net today.  They are doing it because what "if" bitcoin is bigger.  Not a little bigger but much much much bigger.  What if someday there are tens of millions of Bitcoin users.  Then being an established and trusted [casino|exchange|retailer|auction house|marketplace|etc] is suddenly very much worth it.

IMHO Bitcoin will either be much bigger or a footnote in history in 3-5 years.  It won't remain the status quo.

Most of you have probably read:
http://calvinayre.com/2012/09/03/business/bitzino-touts-provably-fair-games-but-can-bitcoin-only-casinos-succeed/

Basically it says bitcoin is too small and unreliable yet to make any online casino based just on it profitable?
Especially when most bitcoin aware people are not really gamblers.
And that comes from the site of the owner of Bodog, so he should know a thing or two?

Yet I see this section here quite active. I suppose most of them are projects just for fun?