A guide to betting with Alt Coins

A look at crypto currency alternatives to bitcoin, including a discussion with two online gambling operators who take alt coins for deposits and bets.

Alternate cryptocurrencies can also be used to gamble online

The first time I wrote about virtual currencies for gambling was at the beginning of 2012. 

At the time bitcoins were trading at about $6 USD per coin and there was a question as to whether this could be the future for online gambling. If proven reputable, bitcoins addressed almost all of the industry's concerns: Payments to and from gambling establishments are instantaneous, avoiding the frustration of having to wait hours or days for payments to clear; Transactions, once approved by the blockchain can't be reversed, thus avoiding the frustration of operators who incurred chargebacks from disgruntled bettors on their credit cards; Transactions are virtually anonymous ensuring that Americans can't be targeted by the FBI and/or police; And most importantly the transactions avoid any use of banks, thereby effectively making the provisions in the UIGEA that require banks to block "illegal" non U.S. transactions meaningless. In fact, one sportsbook manager was so enthusiastic about the future with bitcoins he tried to convince the owners of the book he worked for to accept bitcoins as payment to circumvent gambling laws, but the owners balked thinking that it was a fad and that once other programmers duplicated the idea the whole crypto craze would be worthless. The last I heard this manager was at a different sportsbook which has accepted bitcoin as payment.

I have written about bitcoins many times since that article, although I must truthfully admit I have avoided buying any for the exact same reason that many of the gambling operators did. The process of exactly how coins are mined is very technical and confusing and how it attains its value is mystifying. Unlike a stock where you can look at earnings, products, etc., bitcoins are only valuable because there is a demand for them. In and of itself it's hard to understand how a numerical code mined via some form of software and electricity is worth thousands of dollars. Of course, most people don't understand the process of how money is minted either, but no one discredits the value of a dollar. But bitcoin has proven me and skeptics wrong and several sportsbooks and casinos are now accepting bitcoins as payment, and many prefer it to even fiat currencies, like U.S. dollars. That said, many gambling establishments are still skeptical and will not accept bitcoin for fear that they could become the next Enron and they'll be stuck with effectively useless stock in exchange for sending out real money back to the player.

"There are so many of these coins out there right now," one casino operator said to me. "At some point there has to be saturation and they will all be worthless. Bitcoin, Dash, Litecoin, Ethererum, I just don't get it. I didn't invest in the dot com craze thank God, and my parents didn't invest in the mining stocks that all went bankrupt. I'm not going to risk my business on something I just don't understand. I could be making a mistake, but that's just the way I feel."

Betting with cryptocurrencyAfter talking to the operator, it got me thinking about other forms of crypto currencies and I was curious if gamblers can use them to wager as well. To my surprise a few places have started accepting them although how they are handle it is different at each establishment. I spoke to four places that accept other forms of crypto currencies, known as alt coins but decided for this article to focus on two companies. The first place is Heritage Sports, a well-respected sportsbook with a casino and poker room that has been around for over 2 decades and which was the first "traditional" sports books to offer Bitcoin as a solution for deposits and withdrawals. The manger at Heritage said that "we recognized early on, that Bitcoin had real world applications and tremendous benefit to sports bettors seeking alternative funding methods. While the world markets rally around Bitcoin and other crypto currencies, increased demand and liquidity, Heritage Sports continues to be a leader in embracing new and evolving options."

Another is Fortune Jack, a crypto based casino from Ireland, owned by the Nexus Group. Fortune Jack's management has several years of industry experience and they are highly rated on gambling forums, as indicated by the certificates from gambling watchdogs on their website.

The first question I had for both companies was which cryptocurrencies they accept.

The manager at Heritage Sports said they have 9 options:

"We are accepting alt coins (9 in total). We started a couple weeks ago and its been well received and we see increases each day in the number of deposits via these alt coins. We accept Bitcoin, Bitcoin Cash, Dash, Dogecoin, Ether, Ether Classic, Litecoin, Monero and Ripple."

The spokesperson at Fortune Jack indicated they accept seven different cryptocurrencies:

"At the moment available currencies on Fortune Jack are BTC, LTC (Litecoin), ZEC (ZCash), XDG (Dogecoin), XMR (Monero), ETH (Ethereum) and DASH coins. You can use any of them. Only the games from providers have BTC as the default currency, but you can use any available currency to play them, they exchange other currencies to mBTC."

The next question I had was whether you can wager with alt coins or if it is just a funding and payment method. Heritage indicated that for them all bets are in U.S. dollars and these currencies are strictly for funding purposes:

"The process is used for funding accounts. Our software does not allow for "betting" in crypto currencies. Its simply a method for deposits. Deposits are received and converted to the USD equivalent for betting purposes. Because all deposits are converted at the time of the deposit, bets are held in USD."

Fortune Jack on the other hand says people do bet in their default currency:

"Users are able to play each game with each coin value that is available at Fortune Jack. The main thing is that they should have chosen as default currency that coin value in which they have an active main balance. After this they can play each game. Also, they are free to have an active main balance with different currencies simultaneously."

The third question I had was how exactly these alt coins or even bitcoin are sent to their websites by the player particularly if they are not in an independent wallet, but are sitting in an account at say Kraken or Bitpay.

Heritage explained the process for them:

"Once a customer has a funded wallet in the choice of their crypto, they simply come to our deposit page, select the coin option they wish to deposit with, then generate a unique address to send their deposit to. Once the deposit is confirmed, it's deposited into the customer's player balance."

Fortune Jack was more specific and indicated they have 2 options – buy BTC from Fortune Jack directly or use the BitGo server:

"I will explain process of making deposit on the example of Bitcoin (for the other values the process is same, but the registration is required on the appropriate websites): You can use Buy BTC button or BitGo server. First you have to make an account on BitGo.com to have a wallet ID and after that you should exchange dollars to BTC. When you exchange them add your BitGo wallet ID and the sum will be transferred to BTC on Blockchain (on your wallet ID). It is like your bank account number. So, you can make transfers to or from your Blockchain wallet ID. Once you have the wallet ID and bitcoins in your wallet, you can easily transfer it on your Fortune Jack account."

Looking at the BitGo server they currently have the largest exchanges as customers including Kraken, Genesis, Bitstamp, BitPay, KCoina and Unicoin so the key is to link your account wherever they are being held with BitGo who will verify the transaction on the blockchain and transfer the money to your gambling account. In many ways this is like how it used to be with NETeller, Moneybookers and other eWallets only BitGo becomes the intermediary eWallet.

The last question I had was whether there were fees or delays with using other coins.

Heritage said they had none: "Funds are deposited in the players accounts as soon as we get a confirmation. For bitcoin, the typical time is in minutes. Most alt coins are being received within 30 minutes. The alt coin market is considered a secondary market and therefore in some cases, it can take longer. We don't charge any fees for deposits or withdrawals. Currently, we only offer BTC for withdrawals, but expect we will be adding other options for withdrawals."

Fortune Jack also said they have no fees although there is a 0.1% fee charged by BitGo for deposits over 1BTC.

"The withdrawal process is instant at Fortune Jack but sometimes it is delayed because of security reasons. As for a fee, one of the main benefits that our users can find at Fortune Jack is that we pay withdrawal fees for them. (Although there is a requirement that you play through your deposit before withdrawing).

As for deposits, as usual it needs at least 1 confirmation from the miners until funds are reflected on your Fortune Jack wallet and the fee is dependant on the server from where you are sending the funds. However, if you use BitGo, funds can be available immediately after receipt. It is free for transactions under 1 BTC and 0.1% for transactions above 1 BTC, but that's just for deposits."

So, the ability to gamble with other coins is not only happening now, but is expected to grow. There are currently 32 different crypto currencies and most are being looked at although clearly a few are being disregarded. Namecoin never really took off despite early expectations and hasn't received much acceptance and Potcoin which was designed to service the marijuana industry will never be adapted by the gambling industry. But it must be noted that the big concern expressed to me from the beginning by the one gambling operator - that the whole thing will crash when bitcoin is not the only horse in the race, has not occurred. It seems that indeed crypto currencies will be instrumental in the expansion of gambling both in the United States and around the world.

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