What do Asia and Bitcoin have in common? Massive opportunities, according to Bitgame Labs CEO Jiten Melwani.
Asia is now a massive target for online gambling companies because of the potential revenue it presents. Opportunities for Bitcoin in Asia are also huge as gambling operators start to learn how accepting the digital currency at the casinos will benefit their businesses.
“The greatest opportunity exists for gaming operators, it’s in areas where they have payment struggles. It’s in areas where it’s difficult to get money in or it’s difficult to get money out and that applies to many, many Asian countries,” Melwani told CalvinAyre.com.
In land-based casinos for example, Bitcoin can be used to ease money transfer transactions.
“Bitcoin can make it extremely simple, whereby anyone can move money in Bitcoin directly here and receive their funds in dollars. Similarly, when they want to get paid, they can receive that payment out in bitcoin again. For an operator, it just means there’s less cash moving around,” Melwani said.
But integrating Bitcoin into the gambling industry also comes with some challenges. For instance, the sports betting operators have to deal with sharp players. Melwani has some advice for sports operators on how to manage risks.
“They take a recreational booker approach, whereby they identify who their sharp players are and they cut their limits. This is an approach taken by probably 98 percent of the sports books in the world, and what it means is they quickly identify who their sharps are, which is easy enough to do,” he explained.
However, cutting limits do not work in some instances because sharp bettors can easily set up new accounts and fund them. Melwani said there’s a “totally different” approach that operators can take.
“You have to allow the bet from your sharp player, but you have to use that bet to help determine how your market moves,” Melwani explained. “The most important job you have managing risks as a sportsbook in a Bitcoin world is you have to grade your players. You have to know who your sharps are and when they have the bet, you have to let them bet and you have to move the market aggressively in that direction such that in the end, you do take a position of every event but that position is going to be the same position as your sharp bettors. In the long term, you’re losing a couple of percent of your sharps but you’re also winning that much and more from your non-sharps because of better pricing and because ultimately you move your liability to the same side as the sharpest minds in the world.”