This is the story of a website that offered a service. The service started out being rather good, it later turned shitty, and now there seems to be no earthly way the the continued operation of this site is not a scam. Let's look at the most recent public statement by the site's operator:

Quote from: bit365 on December 19, 2013, 10:54:25 PM Important update on status of payouts: We realize many of you are panicking and I am here to update everyone on the current status of payouts and hopefully ease some tensions. As you know, about one month we realized investments were calculating the wrong profit amounts. While fixing this issue over the next two weeks, the large number of cash out requests while this was on going quickly tapped out the small amount of BTC kept in our hot wallets. What you do not know, is when we went to recover the majority of site funds from the thousands of addresses in cold storage, we were unable to recover the wallet files. In hindsight, it was a bad idea to not let everyone know about this at the time, but we did not want everyone to think their BTC was gone forever. Over the past few weeks we worked on recovering the wallets hoping that this problem could resolve itself quickly. Days and weeks went by and we were still unsuccessful and users became much more impatient waiting for their payouts. However, I am happy to announce that we have now recovered one wallet, and it looks like we will be able to recover all of them. Payouts will now be resuming and as more BTC is recovered all pending bets and investments will be sent out. We will be going through the list of missing payouts, or you can PM us the info and we will make sure it is processed asap. BitcoinSports never was, is, or ever will be a scam. We will never run with your funds. We would not continue to update everyone if we did not have every intention of making good. We will continue to keep everyone updated about this at a much more frequent rate. We apologize for the lack of communication, it has been a stressful time for our users and our staff while we resolved this and we thank you for your patience.

The first thing to get out of the way is that being unable to pay obligations whether due to technical ineptitude, theft, or you just decided you wanted to keep the coins is a scam in the Bitcoin space. The footnotes interspersed throughout the quoted posting establish why BitcoinSports.eu is now a scam. Let us get back to the story of how they got there.

Back in early 2013, when I was new to Bitcoin and rather naive I had seen the glory of accountless gambling sites as exemplified by Satoshi Dice and BitBet. With BitBet I discovered I really like betting on event outcomes, and though it would be sweet if they offered a lot more sporting events to bet on, but they didn't. Being younger and more naive I thought if I could find accountless sports betting books to play my Bitcoin on I'd have a blast. At the time I found exactly two accountless Bitcoin sports books.

The first and older of the accountless sites went by the name BlockBet.net and closed up shop after a whopping three months in operation. They took bets on sporting events from January 12th, 2013 through April 20th 2013 and closed up shop on April 20st after someone won 172.1 BTC and seemed to have broke their bank. The way their site was structured this outcome seemed inevitable. They nominally had a maximum limit of a 10 BTC bet, but when the procedure for entering a bet is send Bitcoin to this address to bet on this outcome at these odds enforcing such limits is an impossible task. Other structural problems exist with their format that would have made this eventual outcome seemingly inevitable. When the effort you expend as the house is simple to publish a betting line and an address and then pay the winners after the event, you deny yourself the opportunity to manicure lines to attract even money on both sides. Fixed odds are a recipe for disaster and force the house to become even more the gambler than their patrons are.

In contrast the other accountless site BitcoinSports.eu introduced things like Betting Slips, reasonably low betting limits, and odds that updated throughout the day before the event creating the impression that they were getting bets matched. For the first few months I used their service rather enthusiastically. It worked as promised. Payouts were very timely. After a few months though the payments started slowing. As they started slowing I started using them less. By June and July I'd reduced my use to odd bets I couldn't find other places. Before the end of the summer I'd begun recommending people against using it.

Then on August 20th BitcoinSports.eu introduce the "Invest" "Feature" explained below.

Quote from: bit365 on August 20, 2013, 02:04:25 AM Investing in BitcoinSports bankroll is now available! Quick overview: Invest and receive a share of the site's profits (or losses) from each bet, based on your investment's percentage of the entire bankroll

15% commission charged on net profits when your investment is cashed out, or each Sunday at 11:59 PM EST, whichever comes sooner

The max profit of each bet is 1% of the site's bankroll

Detailed statistics are available including total invested, wagered, profit, and number of bets

A list of all graded bets will be made available How to invest: Click "Invest" on the Invest menu

Send your investment to the given address within 2 minutes More detailed information will be available here and on the website very soon! www.bitcoinsports.eu

Other ventures in Bitcoin have adopted similar backing measures to varying degrees of success. The ventures that have had some sort of success with this backing structure like Just-Dice and MPOE bonds is that the successful things don't have this mechanic tacked on to a service which had been slowly declining in quality for months.

As soon as BitcoinSports.eu started taking "investment" the quality of service they offered to gamblers dropped even further. What were delays in payment of winning bets that only occasionally stretched to a full 24 hours became standardized multi day delays. Against my better judgment I'd placed a couple of minimum bets and when they won waited an agonizing 3 to 4 days for payment. I started feeling really uncomfortable about the couple futures bets I made in July, and removed BitcoinSports.eu from my betting workflow for the most part forgetting it was a thing. I kept tabs on their solvency until December when my last outstanding futures bet there was a loss. An earlier prototype of this post was actually drafted for the contingency that I would have won on that betting slip. Their forum thread is full of complaints similar to what that post would have been though.

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