Bitcoin: Delving into the Unknown

Speak to anyone in gambling about their thoughts on the future of the industry and you will find one topic pops up time after time – Bitcoin. Calvin Ayre predicted at the beginning of the year that a mainstream operator would start to accept the currency in 2014 and this has come true as Vera and John, 5dimes and a number of other operators have begun to offer Bitcoin as a deposit and withdrawal option.
Due to it’s somewhat murky history as currency used in online black markets, both operators and affiliates have been tentative about taking the Bitcoin plunge. However after reading numerous Bitcoin success stories, I decided to strike while the iron was still somewhat hot and begin the search for a high quality exact match domain in the niche.
After some searching I managed to acquire BitcoinSportsbooks.com in a private auction for the bargain price of $275 and decided to focus on building a high authority site in the niche. While it is still a work in progress and I am continuously adding more content, I feel that my experiences so far  are going to help a lot of affiliates understand how vastly different this niche is to the standard online gambling affiliate world.
In this article, I will focus on the three key differences of affiliating in the Bitcoin niche compared to working regular casino or sportsbook affiliate programs. These will enable you to avoid making early mistakes and should help you to get started in the industry.
Who Is the Owner?
In the online gambling world, there is a difficulty in establishing who the owners of sportsbooks and casinos are (particularly those operating offshore and servicing US players). Frequently, corporate structures include multi-jurisdictional ownerships across countries that do not share information with anyone. Even if you do somehow manage to find a name registered on corporate document, most likely it is not the real owner of the operator but just a nominee director.
Owners have many reasons for concealing their identities, most genuine, though some less so. The majority of people getting into the operator side of the business start out with good intentions and plan to run reputable shops. However, the reality is that businesses do fail and even those with good intentions can turn rogue when faced with financial difficulty. There are massive numbers of scam reports that take place in the gambling industry and oftentimes the perpetrators are not held accountable. The old cliché ‘follow the money’ proves true in standard currency crime and investigation, despite it seldom happening in gambling crime due to the heavy costs involved and the reluctance of the local jurisdiction to share information due to the crime not being severe enough.
When we mesh together the secrecy of Bitcoin as a Cryptocurrency and the hidden nature of ownership of online gambling sites we most definitely have a problem in holding anyone accountable if something goes wrong.  In theory, certain circumstances could lead to Bitcoin transactions being traceable. However, any end user who takes basic precautions can ensure that their transactions on the Blockchain will be never be traced.
In a hypothetical investigation, the crime severity will rarely reach the chain of command that will approve the high costs and resources needed to find the culprit. This is then added on top of my point above about company ownership. One just needs to remember the sad case of MtGox to realise that tracing Bitcoin transactions is an extremely complex process even when dealing with massive sums of money.
What should you do? Be careful about who you get into bed with. There are several already defunct Bitcoin affiliate programs, some claiming to be hacked and robbed, while others just closed overnight and ran off with player’s and affiliate’s money.
My tips for choosing a program to work with? Do your research. Email them and see what they have to say. See if they have a license or if their software provider is reputable. A resource like the gambling forum on BitcoinTalk.org and Reddit Bitcoin is invaluable for this niche.
Stuck In The Stone Age
When starting out, one affiliate manager told me that affiliate programs in the Bitcoin niche are currently at the same level of casino affiliate programs 10 years ago – and that is not an exaggeration.
If you have trouble trusting your affiliate program in gambling, then you will not be overly excited at the prospect of those in the Bitcoin niche. While there are a handful of companies that offer solid affiliate backends, the majority are almost laughably bad. Many do not offer campaign tracking, while even more offer no statistics. The worst of the bunch don’t offer anything other than a link and a promise to send you your referral commissions at the end of each calendar month.
As the industry has somewhat matured this year some bigger players such as CoinGaming have entered the space, bringing more up-to-date affiliate systems with them. Sadly though, most of the Bitcoin affiliate programs are still stuck in the Stone Age.
My advice, choose your partners wisely. Unless you are comfortable with no affiliate backend, no transparency and no stats, you should make a point of only working with the bigger operators, for peace of mind if nothing else.
Commission Model
Probably the most commonly asked question by affiliates every day when peaking to new programs. How much can I get paid? This is usually answered in terms of Rev Share and CPA.
This is where you need to be careful with Bitcoin affiliating. Operators are offering a wide array of commission structures that can be thrown together with suspect terms and conditions. Many of the bigger sportsbook operators pay a percentage of a player’s betting turnover. The oldest Bitcoin betting site AnoniBet offers a percentage of turnover combined with session cookie tracking as part of their affiliate terms. For those asking, payments based on a % of turnover is the same model used by Pinnacle Sports and SBOBet – and is an extremely unpopular choice amongst affiliates who market to recreational bettors. Likewise, session cookies are highly frowned upon in the gambling niche and PaddyPower are regularly criticized for their insistence on using them. Standard cookie times are 15-30 days from most reputable affiliate programs.
Perhaps it is unfair to single out AnoniBet, as Nitrogen Sports and several others use the same low commission model. Of course there is nothing wrong with this per se – it is just something to be aware of as an affiliate.
Similarly, many casino programs pay on player turnover while some make things even more confusing by paying commissions as a % of the house edge in a game. My recommendation is to avoid these programs and stick with those offering traditional revshare, as my results over a decent sample size have shown rev share to be far more lucrative. I am yet to find a program offering CPAs though as the industry continues to grow I’m sure this isn’t too far off.
How Will It End?
The industry is still a pup and has a lot of obstacles in its way before reaching the same levels of maturity of standard gambling affiliating. I suspect in the coming year, there will be some consolidation and standardisation in the niche where the more successful operations will buy up the player databases of struggling outfits. Similar to the gambling niche, the operator side will become increasingly competitive, which can only be a good thing for affiliates.
As a Bitcoin gambling affiliate, the advice of Darwin seems most apt for survival.  “It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change.”