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When Bitcoin was first introduced in 2009, gambling quickly emerged as one of the cryptocurrency's primary use cases. Players, particularly those in the United States, could use Bitcoin as a means to side-step regulators and bet on markets with near-total anonymity.
Looking back, the growth of this market seemed all but inevitable.
In 2006, George W Bush signed into law the Unlawful Internet Gambling Enforcement Act (UIGEA), imposing enormous restrictions on money transfers for online gambling sites. While the UIGEA didn't outright ban online gambling, it put the wheels in motion for a subsequent crackdown on online poker rooms in 2011. The events of 2011 followed what had been a long line of anti-gambling legislation in the US, with its roots in the 1992 Professional and Amateur Sports Protection Act, which outlawed online sports betting.
In the years following, the United States cemented itself as a jurisdiction that was not just a strict regulator of online gambling, but one that was active hostile to it. Yet as with the prohibition of the 1930s, outright bans conducted in this way only serve to push these operations underground, and so it did.
Evolution 0: SatoshiDice
SatoshiDice was one of the first Bitcoin gambling sites on the market and the first to implement the now famous Bitcoin dice game. It became the de-facto place for gamblers looking to win big and without the prying eye of regulators. The game saw hundreds of thousands of Bitcoin wagered between its launch in 2012 and the casino's eventual sale for $11.5 million in 2013.
SatoshiDice allowed players from anywhere in the world to place bets with no registration required and nothing more than a Bitcoin wallet. Wagers were taken as Bitcoin transactions, with a separate address for each payout multiplier. For example, a gambler attempting to win the game's massive 64000x multiplier would have sent a transaction to the address 1dice1e6pdhLzzWQq7yMidf6j8eAg7pkY - an address which saw over 410,000 wagers equaling 2,955 BTC. Unfortunately, Satoshi Dice was forced to block US players in 2013 after receiving a number of legal notices and was subsequently sold a few months later.
Evolution 1: Bitcoin Joins Traditional Casinos
SatoshiDice was the casino to launch a thousand casinos. Bitcoin's sudden surge in popularity amongst gamblers drew the attention of other operators and - while hundreds of unregulated casinos like SatoshiDice continued to emerge - a new wave of regulated traditional casinos were beginning to add Bitcoin as a banking option.
