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Online Gambling Site Bets On Bitcoin To Avoid U.S. Laws 347

Posted by Unknown Lamer
from the hopeless-endeavor dept.
SomePgmr writes with a story about an online gambling site planning to use Bitcoin to sidestep U.S. regulations that effectively ban online gambling. From the article: "Michael Hajduk had sunk one year and about $20,000 into developing his online poker site, Infiniti Poker, when the U.S. online gambling market imploded. On April 15, 2011, a day now known in the industry as Black Friday, the U.S. Department of Justice shut down the three biggest poker sites accessible to players in the U.S., indicting 11 people on charges of bank fraud, money laundering, and illegal gambling. ... Infiniti Poker ... plans to accept Bitcoin when it launches later this month. The online currency may allow American gamblers to avoid running afoul of complex U.S. laws that prevent businesses from knowingly accepting money transfers for Internet gambling purposes. 'Because we're using Bitcoin, we're not using U.S. banks — it's all peer-to-peer,' Hajduk says. 'I don't believe we'll be doing anything wrong.'"
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Online Gambling Site Bets On Bitcoin To Avoid U.S. Laws

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  • Sweet (Score:4, Informative)

    by SleazyRidr (1563649) on Thursday January 10, 2013 @06:27PM (#42551883)

    It'll be nice to have an established poker site taking Bitcoins. Not that I want to disparage the current bitcoin poker sites (I like seals with clubs) but they just don't have the polish and finish to which I've become accustomed.

  • So... It's an Arcade (Score:5, Informative)

    by CanHasDIY (1672858) on Thursday January 10, 2013 @06:33PM (#42551971) Homepage Journal
    Sounds like a dumb idea, until you realize that Chuck E. Cheese and similar businesses have, for decades, been using a similar tactic to avoid running afoul of gambling laws: You're not playing for gifts or money, you're playing for worthless tokens!

    The fact that said worthless tokens can be exchanged for things with monetary value is, apparently, non sequitur.
    • by bitt3n (941736) on Thursday January 10, 2013 @06:45PM (#42552131)
      this is also how pachinko parlors in japan work to get around japan's gambling laws, except you exchange the trinkets for actual money at an establishment next door to the pachinko parlor.
    • by TubeSteak (669689)

      Sounds like a dumb idea, until you realize that Chuck E. Cheese and similar businesses have, for decades, been using a similar tactic to avoid running afoul of gambling laws: You're not playing for gifts or money, you're playing for worthless tokens!

      I doubt the Feds would allow Japanese style Pachinko gambling, where one business sells/buys the steel balls and another has the gaming machines.

      Maybe you could do something online, with a non-US company selling/buying Entertainment Bucks and online casinos accepting/paying out with the same.

      The Feds would probably call it all money laundering and make your life hell.

    • by geekoid (135745)

      In most states, the machine a Chuck E. Cheese, and other places, ARE regulated like gambling. You know thos crane machine? the need to meet a criteria of winning.
      Lets say, for this example they must have the odds of 1:10.
      form 9 out of 10 tries, there isn't enough force in the grip to win.

    • No, Chuck E. Cheese and similar businesses (like carnival midways) run games that are (at least theoretically) games of skill rather than games of chance - because it's the latter than run afoul of the gambling laws. What you're playing for is irrelevant.

  • Doomed to fail (Score:5, Interesting)

    by Dishwasha (125561) on Thursday January 10, 2013 @06:37PM (#42552033)

    Not too long after Black Friday I had the same idea of using Bitcoin currency instead of real moolah. A site called Betcoin [betco.in] had already done this using the jpoker/jspoker [pokersource.info] library. I frequented the site for a while and even went back to it months later. In both cases the volume of people on the site was extremely low and the amount of bitcoin compared to real USD value was paltry even in comparison to the Full Tilt Poker $0.25/$0.50 tables. There just wasn't enough money in circulation on the site and not many people wanted to stake their futures on the volatile Bitcoin currency in the poker world. Plus, anyone that did any decent research just found various overseas and Indian-owned online casinos (harder for the US Gov to prosecute Indian territory casinos in Canada) and could exchange money by select Visa merchants, cash proxy sites, or by money order.

  • Hajduk says. 'I don't believe we'll be doing anything wrong.'
    Tell that to the US Federal Marshal, FBI, CIA ('I' stands for "It's National" not 'International'), and every other ATF-related or unrelated agency that every existed when they come knocking at your door with handcuffs. With 15 years defending yourself, maybe, just maybe, you'll get out before 2030.
    Bitcoin forever, oorah.
    • Hajduk says. 'I don't believe we'll be doing anything wrong.'

      Then, why does he call himself "Hajduk"?

    • by geekoid (135745)

      The I stands for Intelligence in CIA.

    • "I don't believe we'll be doing anything wrong." Federal Judges really go for that kind of sentiment. It's the old Steve Martin excuse: "I didn't KNOW it was illegal not to pay your taxes!" - part of his comedy routine in the 70's.
  • by SuricouRaven (1897204) on Thursday January 10, 2013 @06:43PM (#42552121)

    Of course the government has to outlaw gambling. It is dangerous and addictive, encourages crime and exploits the poor. Except the state lotteries, of course - those are somehow none of the above.

  • by bitt3n (941736) on Thursday January 10, 2013 @06:47PM (#42552151)

    I don't believe we'll be doing anything wrong

    shortly to become

    I didn't believe we were doing anything wrong

  • by decora (1710862) on Thursday January 10, 2013 @07:03PM (#42552339) Journal

    have a whole department gaming the bitcoin system.

    funny how gambling is illegal -- unless you do it with other peoples money

  • by sirwired (27582) on Thursday January 10, 2013 @07:03PM (#42552345)

    I think BitCoins were poorly designed (from an economic standpoint), and will never be a serious form of payment for anyone NOT wanting to engage in currency speculation on the volatile rate, but for gambling, they totally make sense. That is, as long as they realize that their BitCoin exchange rate will be an additional element of their bet.

  • indicting 11 people on charges of bank fraud, money laundering, and illegal gambling

    Gambling period runs a very high profit margin, to try and increase that through illegal means is just well... messed up. The use of bitcoin shows that the owners of these websites will do just about anything for even potentially earning a buck.

  • The use of a dubious currency just distracts from the real problem - gambling with an online site that is not certified by anyone. Regulated casinos have to document exactly how much they rigged each game in their favor. An unregulated online site can cheat you anyway it wants to.
  • How does betting my money on the results of a card deal any different than gambling on a stock market? It's all gambling...why is stock market ok, but not cards?

    Even betting on currency fluctuations is gambling...And if you want to see about criminal activity due to gambling...Look at the BANKS...

    • by geekoid (135745)

      Control and regulation.
      And the stock market isn't gambling like gamin is gambling. The fact that you don't understand the differences tells me you haven't read anything beyond headlines on this issue.

    • Here is the difference between investment and gambling. When you gamble, you win or lose money arbitrarily. There is no net gain in value from a gambling transaction, only a transfer of wealth. When you factor in transaction costs, gambling becomes a deadweight loss to society. Gambling is a negative-sum game. Investment, by contrast, is expected to be a positive sum game, and to create wealth. The ideal investment will be Pareto efficient -- something that can never happen with gambling. This is why

  • Money laundering doesn't have to be done with money. Any exchange of value used to obfuscate verboten activity is per-se money laundering

    Transferring a bag of coconuts from the trunk of one car to the trunk of another, representing an exchange of value, when done to obfuscate illegal activity, is money laundering.

    That's US law, and it's the law in a bunch of other countries too.

    "It can't be money laundering if it's not money"

    Yeah, enjoy prison, guy.

    --
    BMO

  • Casinos seldom use cash. Some never use cash. It's all tokens called chips.
    The fact that you can turn bitcoins into dollars means that, yes, the US regulates it.

    You should really have a lawyer look into the governments view of token when gambling.

    Ever wonder what prostitute don't take a token that can be exchanges elsewhere as cash. A place that also sells tokens?
    Cause it's still illegal.

    • by PPH (736903)

      The fact that you can turn bitcoins into dollars means that, yes, the US regulates it.

      You can turn practically every currency on this planet into dollars. Now ask all of the sovereign governments whether the US regulates them.

      Reality: The US regulates YOU, the US citizen. For all intents and purposes, you live behind an economic iron curtain. Have fun traveling around the globe. But when the DoJ wants your ass, its theirs. Read your Thirteenth Amendment and weep.

  • by sandwall (1459951) on Thursday January 10, 2013 @08:31PM (#42553013)
    I'm pretty shocked by the generally disparaging remarks regarding bitcoin. Nearly *all* currencies are speculative to some degee, just think of the exchange market. Investing in euro's doesn't seem like such a great idea at the moment but that certainly wasn't the case before the credit crunch. As long as the supply is limited (which it is) and there's a demand, bitcoins will have value. Many of you are assuming there is no demand, clearly you haven't visited the silk road. Bitcoin serves a purpose, it's digital cash, pure and simple. As long as people value *relative* anonimity in digital transactions (and there will always be a section of the population that does), there will be a demand.

I've never been canoeing before, but I imagine there must be just a few simple heuristics you have to remember... Yes, don't fall out, and don't hit rocks.

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