Bitcoin gaming site SatoshiDice closes to US players

Citing legal advice, Bitcoin gaming site SatoshiDice is closing to US players, moving to block all US-based IP addresses from the website.

Posting on Bitcointalk and the Bitcoin reddit page, satoshidicepr, an official representative of the site who asked to remain anonymous, said the decision, which is effective as of today, was taken following “extensive legal counsel.”

“The best way to limit legal risk for SatoshiDice, and thereby protect its stakeholders, is to block US players,” the post states.

The company adds that the decision does not mean that online gambling is illegal in the US, nor does it mean that bitcoin gaming is illegal:

“However, the courts have not been clear on the definition of gambling, nor on what would constitute 'legitimate gaming,' nor are jurisdictions properly defined, and thus this is a proactive measure to protect those involved in the project.”

In an e-mail to CoinDesk, the SatoshiDice spokesperson added, “SatoshiDice is building a ubiquitous global brand in the bitcoin space, and must take the coercive threat of government seriously.”

An online post stated the decision to ban US players was not taken because of any citation or notice from any government agency, and is unrelated to the US Department of Homeland Security’s recent move to clamp down on Mt. Gox/Dwolla transactions:

“It is a proactive measure, based on the prudent legal guidance of our trusted lawyers. We believe this is a wise move for the site to perpetuate in the long term.”

Online gambling remains a grey area in the United States. There is no federal law against online gambling; however. online sports betting is illegal, and most online casinos are located in other countries because taking bets on a server located in the US is also illegal.

As CoinDesk reported earlier this week, in 2006, the US government began legal action against a number of online gaming companies, including London-listed BetOnSports. The company’s CEO, David Carruthers, was arrested in 2006; founder Gary Kaplan was also later arrested. Both men were sentenced to prison terms and the company was fined $28 million.

Describing itself as “the most popular Bitcoin betting game in the universe,” SatoshiDice allows players to bet on a roll of the dice using bitcoins. The company has processed over 4.6 million bets worth more than 3.6 million bitcoins (over $419 million, based on trading prices at press time). Because bitcoin transactions are private, the SatoshiDice spokesperson was unable to say how many of those bets were placed by US-based players.