Inside Asian Gaming

INSIDE ASIAN GAMING | January 2014 36 I f you haven’t heard of Bitcoin yet, you soon will. Bitcoin, the peer-to-peer digital currency launched in 2009 and taking the Internet by storm, appeared before the US Congress in November in a hearing before the Senate Homeland Security and Governmental Affairs Committee on the “Challenges and Promises of Digital Currencies.” This has been Bitcoin’s breakout year. Prior to 2013, Bitcoin was mainly known for its reported connection to Silk Road, an underground encrypted Web site which allowed users to purchase drugs and guns anonymously over the Internet. Today, however, Bitcoin is popular among many innovative small business owners looking for novel ways to gain customer loyalty, cut costs by avoiding processing fees charged by credit card companies and e-commerce payment processors, and obtain security in business transactions through Bitcoin’s format of irrevocability. In addition to the many online vendors turning to Bitcoin, in recent months brick- and-mortar businesses accepting Bitcoin have been popping up—Greene Avenue Market stores in NewYork City and a Subway sandwich shop in Lehigh Valley, Pa., for example. The first Bitcoin ATM opened in Vancouver in November with roughly US$95,000 processed through it during the first week, according to reports. While gaining momentum, Bitcoin is not without its critics—the instability in its value and unknown regulatory barriers are two of the major criticisms. Bit of Chance Despite these issues, certain businesses hopped onto the Bitcoin bandwagon early and enthusiastically. During Bitcoin’s short existence, Internet-based casinos have become one of its most popular outlets. Bitcoin casino operators have been and continue to accept bets from US players (although some sites maintain certain age and location restrictions). But does this run afoul of US Internet gaming laws? In 2006, Congress passed the Unlawful Internet Gambling Enforcement Act of Bitter Truth Why Bitcoin’s newly found stardom may make online Bitcoin casinos go bust By Eric D. Frank, Duane Morris, LLP TECH TALK