As various tech companies report their fourth-quarter 2012 earnings numbers this week, so are two gray-market, Bitcoin-based casinos—and one is turning profits in the hundreds of thousands of dollars after only six months of being in business.
Recently, both SatoshiDice and bitZino released their financials. If these self-reported earnings are to be trusted and the companies say they are, given that a Bitcoin block chain can be read by anyone, then running a Bitcoin-based casino yields a tidy profit.
“These tiny startups are hitting some major online casino pain points. Theyre crushing it on those fronts and as an entrepreneur, I think thats rad—they are leveraging a disruptive technology to try and kick a large-scale industry in the balls,” said Peter Vessenes, the CEO of CoinLab, a Bitcoin-based business, which got $500,000 of venture capital last year.
SatoshiDice, which has servers based in Ireland, is a pseudo-random number generator game where players choose a number and then bet on the likelihood that a “rolled number” is greater than the one they’ve selected. If the rolled number is greater, they win. The house has a 1.9 percent edge—which is where the profit comes in.
The online dice game has returned profits to the tune of ฿33,310 $596,231 during 2012—an average actual profit of ฿135.96 $2,416 per day from May through December 2012. During that period, players put down a total of 2,349,882 bets. That’s minuscule by Las Vegas standards, but its still respectable.