Bitcoins and Online Bingo

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Bitcoins and Online BingoMost people in the gaming industry remember 'Black Friday ' very well. On April 15th 2011 the US government swooped down on several popular online poker sites and seized their domains and assets. Thousands of American players had no access to their poker accounts. Canadian online poker operator Michael Hajduk had invested one year and $20,000 to develop Infiniti Poker, when the US internet gaming market imploded. Hajduk said "It was like a bomb went off. U.S. players were uprooting their families and moving to Malta. Crazy stuff was happening."

To avoid trouble with US authorities Calgary-based Infiniti Poker plans to accept Bitcoin, a cyber-currency that is gaining popularity. In the past Bitcoin has received bad press because of the currency's association with the drug selling website Silk Road. The virtual currency may help American players to avoid running afoul of complicated US laws related to online gambling. Currently US laws prevent banks, credit card companies and other businesses from knowingly processing gambling related transactions. Hajduk told reporters "Because we're using Bitcoin, we're not using U.S. banks--it's all peer-to-peer. I don't believe we'll be doing anything wrong."

Bitcoin was developed by reclusive programmer Satoshi Nakamoto. Bitcoins are like other forms of currency and currently have a value of about $13 USD. The value of Bitcoins is determined by demand. Transactions using Bitcoins take place in a decentralized peer to peer network. Currently about 2,000 online merchants accept bitcoins. Individuals can purchase bitcoins at online exchanges like Mt. Gox. Payment processor BitInstant also sells bitcoins at 700,000 U.S. locations. Participants include retail giant Wal Mart, Duane Reade, and 7-Eleven stores. Users store bitcoins on their computers and mobile phones or in 'e-wallets.'

Hajduk says Infiniti Poker will accept credit cards but American players will be limited to bitcoins. Hajduk said that using bitcoins reduces the time it takes for players to cash out. Hajduk stated "At the end of the day, [the government] cannot freeze your account because they cannot kick down the door to Bitcoin." Bitcoins offer American players the ability to fight back against puritanical and antiquated gambling laws. Several online bingo operators have expressed an interest in bitcoins. The use of bitcoins will allow operators to accept American players and could spark an online bingo boom.

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