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In this article we discuss anonymity in gambling, from the Ridotto casino in Venice to internet age of the anonymous casino which accepts crypto currency.
This is a history of fun: the birth, death, and resurrection of the anonymous casino over the last 400 years
The Enlightenment
Most historians will tell you the Age of Enlightenment began in 1637 with the publication of Descartes’ philosophy Cogito, ergo sum (“I think, therefore I Am”), and ended in 1789 with the French Revolution. However, we propose an alternative history. A history which is more unified and at the same time inextricably linked to this period’s core foundational principles. Indeed, we would even go so far as to say that we are re-writing history. So, let the story begin…
In 1638, only 1 year after the publication of Descarte’s bombshell, the first ever casino appeared in Venice. This marked a new epoch in gambling and more broadly, human civilisation. This singular event, in our view, marks the true birth of the Age of Enlightenment. Moreover, this was an anonymous casino named the Ridotto or ‘Il Ridotto’. Enlightenment ideas were now being translated into enlightened practice.
Gambling had of course existed for millennia before the arrival of the Ridotto; we can trace back the six-sided dice to Mesopotamia circa 3000 BC. But the Ridotto was epochal because it was the first ‘organised’ gambling venue. Put another way, it institutionalised for the first time the activity of gambling.
The founding fathers of the Ridotto recognised a fundamental principle necessary for the flourishing of their new institution i.e. privacy. They embedded this not only in the name, which translates into “The Private Room”, but also in its practice. Indeed, the Ridotto’s founding charter required customers to wear masks.
Although the requirement to wear masks probably took things too far by today’s standards, it is still nonetheless remarkable. This is because it illustrates just how salient the need for privacy really was in the private realm of enjoyment. Masks symbolise that people don’t want to be monitored by an over-reaching government (or clergy).
The ‘reformers‘
The Ridotto proved extremely popular and even by today’s standards enjoyed a remarkably long hot streak, lasting a full 136 years. However, the Venetian politician Giorgio Pisani shut down the world’s first casino in 1774 as an act of ‘reform’, reflecting a shift in mood on the ground. Just as the creation of the Ridotto was the first corporeal event that reflected the new ideas of the Enlightenment, its closure equally symbolized the Enlightenment’s fading. The progressive ideas that had underpinned it were now being superseded. Pisani in our view, not only shut down the Ridotto, he also pulled down the curtains on the Age of Enlightenment.
It is no coincidence that the creation and subsequent closure of the world’s first organised casino venue almost exactly coincides with the mainstream historical consensus of the beginning and end to the Age of Enlightenment. Ideas precede action.
The futility
Unfortunately for the so called ‘reformers’ however, the genie was now well and truly out of the bottle. The closure of the Ridotto was a symbolic victory for Pisani and his likes, but it was too late. Organised casinos began to emerge and flourish all over the world for the next 400 years, more or less uninterrupted.
Some countries of course did prohibit them completely, but most permitted them under some variety of government licenses. It was more profitable to regulate and tax, rather than prohibit and push them underground. Although the requirement for patrons to wear masks didn’t catch on, the principle of customer anonymity and privacy was more or less preserved until the age of the internet.
Customers could walk into a casino with cash and gamble at their leisure with no questions asked. And except for the evolution of certain games, this model continued more or less uninterrupted for the next 400 years. Governments were more or less happy, or at least tolerant of the status quo; they still got a share of the take, either by monopolizing their local casino operations entirely or by taxing the profits and in some cases also the winnings of their citizens. It was a winning formula all round.
Part 2 – Death
The internet
The internet revolution, however, changed everything. The control which governments which had enjoyed over their land-based casino establishments (as well as their patrons) within their local jurisdictions, began to unravel with the advent and proliferation of online gambling sites. Casino patrons in one country could now play in an online casino in a totally different country at the click of a button.
Suffice to say, this did not please the powers that be. The steady revenues they had managed to extract from their traditional land-based casino operations over the last 400 years or so – through the taxes levied on the operators and the customers – was starting to dry up and could no longer be relied upon. And in those countries that had for centuries successfully prohibited organised gambling and casino activity, their citizens were now discovering new individual freedoms.
The regulation
What to do? Rather than move with the times, instead, they decided to drastically tighten and broaden control beyond casino operators to additional parts of the economy. It was no longer enough to regulate just casinos within their jurisdiction, if individuals could gamble in one beyond its borders in just a few clicks of a mouse. Therefore, governments in virtually every country in the world extended their control to the broader payments and banking system.
In many respects this was a masterclass in re-establishing government control. Virtually every country in the world regulates their banking and payments industry. Therefore, payment providers not ‘approved’ by their host governments risk fines, losing their payments license and criminal sanctions.
In the new parlance, this is what they called ‘compliance’. Not only that; in the new era of digital payments, governments could monitor exactly what their citizens were spending their money on. Any gambling income that individuals earned was now easily visible within the payments system and readily available to governments. And with this information at hand, once again, gambling income and winnings could be readily taxed.
And so, the onset of the internet revolution had within a few years brought an end to the individual privacy and liberty that it had promised. Arguably, for those private citizens who enjoyed gambling, it had made matters worse. Their governments could now track their every move, and every financial transfer within the payments system. If their home country prohibited gambling, it would now be virtually impossible to gamble online using the payments system.
It looked like the end of an era. After 400 years, Big Brother had finally snuffed out the institution of the anonymous casino. Individuals could no longer gamble online without their governments knowing about it.
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Part 3 – Today: Resurrection
The advent of Bitcoin
And then, in January 2009, Bitcoin happened. An individual (or potentially group of individuals) going by the name of ‘Satoshi Nakamoto’, created a private currency and payments infrastructure both anonymous and decentralised by design. Bitcoin exists outside and totally beyond the realm of any government. Much has already been written on Bitcoin in terms of a general topic overview, so there is no need to repeat it here. Instead, we zero in on how its unique characteristics, including that of cryptocurrency more generally, opened the door once again to the anonymous casino and anonymous gambling more generally.
First, all Bitcoin transactions are completely anonymous by design, as mentioned above. The transaction process doesn’t require any personal data sharing. This gives users of Bitcoin complete anonymity when transferring funds and betting online.
Traditional payment methods (e.g. debit/ credit card and e-wallets) require sharing sensitive personal data (card and bank ac data, name, address etc), which is a technical and regulatory requirement. It also creates a paper trail on the bank account and card account. Third parties such as tax authorities, banks (and spouses!) can trace your online activities.
The next characteristic is the unrestricted use of Bitcoin. Provided the vendor you want to transact with accepts Bitcoin as a payment method, you can use it where you want and when you want. Because Bitcoin doesn’t depend on third party payment companies for processing, transactions can never be rejected.
Third party fiat payment companies on the other hand can block and reject certain transactions for legal and regulatory reasons. This means that certain types of transaction i.e. gambling, and certain jurisdictions where those gambling companies may be located, are out of reach for some customers. Bitcoin completely does away with such third-party interference in your transactions.
The potential
Finally, as a decentralised currency, Bitcoin is borderless; you can receive and make payments anywhere in the world. Nobody, be it government, regulatory body or any other third party can inhibit a Bitcoin transaction. So long as a gambling site accepts Bitcoin as a payment method, you can deposit to that site, gamble on it, and withdraw your winnings from it regardless of where it is located.
For sites that use traditional ‘fiat’ payment methods there are severe restrictions on who can deposit, gamble, and withdraw depending on where they are located because of government, payment and banking regulations. If your region prohibits online gambling, then you will likely encounter severe difficulty with cross border fiat payment transfers.
With these characteristics (anonymity, unrestricted use and borderless commerce) hard wired into the design on Bitcoin it is unsurprising that Bitcoin casinos and sports betting sites have witnessed a meteoric rise in popularity over recent years. These sites grant their patrons what they need and liberties they once enjoyed; a private space to gamble free from the interference of overzealous governments. Indeed, the arrival of Bitcoin marked the resurrection of an ideal born in the Age of Enlightenment, Il Ridotto; the anonymous casino.
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