BITCOIN
Bitcoin enters the mainstream
The recent decision from the UK Gambling Commission to add digital currencies to its list of acceptable payment methods could prove a watershed moment for Bitcoin, says CoinGaming CEO Tim Heath
A
s with a number of industries, it looks like gaming is finally having a Bitcoin moment.
In recent months the digital currency has been gradually entering the mainstream, with the financial services sector particularly keen to jump on board. Meanwhile, it is now not uncommon to see Bitcoin discussed alongside traditional currencies on the financial pages of newspapers. For the gaming industry, the big moment
may well prove to be the UK Gambling Commission’s announcement in August that it was adding digital currencies, including Bitcoin, to its list of acceptable payment methods for licensees. The announcement was part of a review into the Commission’s Licence Conditions and Codes of Practice, and came following a period of consultation with industry stakeholders and licensees. What the revised Code boils down to is that
as of October 31, online operators which hold a UK Gambling Commission licence will be allowed to accept Bitcoin just as they would with a standard fiat currency. I predict this will be just the beginning and there are rumours that a number of other regulatory bodies are in advanced discussions to introduce similar amendments which will regulate for Bitcoin and digital currencies.
Coining it So what does this mean for operators and
providers, and what opportunities exist to innovate around digital currencies like Bitcoin? The primary area where I can see major innovation for the gaming industry is in the
payments space, which has proved a major thorn in the side of many operators. Understandably, customers are often frustrated by the length of time it takes operators to process withdrawals. While a deposit is instantaneous, most customers must wait several days for withdrawn winnings to land in their bank accounts. We’ve seen a number of operators struggle with this dilemma and attempt to introduce new products to solve it, with varying success. I would argue that Bitcoin is the only way to
truly solve the problem. The nature of Bitcoin transfers makes them safe, secure and almost instantaneous, with everything logged on a publicly accessible ledger. One of the sportsbook brands we
supply at CoinGaming,
SportsBet.io, is able to process withdrawals in an average time of just 2.5 minutes. Just to emphasise, that is two-and-a-
half minutes from a customer pressing the ‘withdraw’ button to having the money in their Bitcoin e-wallet, ready to spend. Traditional payment providers simply cannot compete with this level of service, and now the Gambling Commission has given the green light in the UK, I believe we will see a lot of operators begin to experiment with offering Bitcoin payment options to customers.
Keeping them coming back Although on a certain level it might seem
counter-intuitive for operators to dedicate resources to making it easier for customers to withdraw their money, all the research shows that customers who know they have easy access to their money are more likely to deposit. This can have a number of knock-on benefits
for operators. For instance, it can help boost cross-sell as customers feel in greater control when it comes to moving their money between wallets. The reduction in
payment fees also means that operators are able to offer customers the option to deposit smaller sums of money, which is ideal for sportsbook customers wanting a first try on casino, or vice versa. It can even open up whole new demographics of potential customers who would prefer to make a series of micro-deposits rather than be forced into a single, large deposit. It’s true that there are still a number of challenges that digital currencies face, and for the time being it will likely remain a niche for tech-savvy millennials. But of course this is one of the most highly sought after groups for operators, and any edge could prove vital as CPAs and marketing costs continue to rise. With a broader Bitcoin egaming
infrastructure beginning to develop, the Gambling Commission’s announcement might just kick-start a Bitcoin betting boom. It will be those operators willing to embrace the innovation from the outset that are best placed to succeed.
OCTOBER 2016 57
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