There are several allegations of unethical conduct against Cloudbet, so the Cryptoinfowatch decided to contact the management of the company regarding this issue.

Cloudbet which is an online Bitcoin betting site is withholding payment of some players using a term of service which restricts usage of the site in some jurisdictions such as the United States.

The situation is causing furor with many users of the site. There is an ethical question raised by the policy of Cloudbet which is that the company accepts bets from these users and have no problem taking their bitcoins when they lose but when they win they’re required to provide IDs with which the company decides if they should be paid their winnings or not.

Outside Excluded Jurisdiction

For instance a US citizen vacationing in France filed this complaint on Reddit:

“I am a USA citizen traveling abroad in Europe (France currently), I placed a 1.0 BTC bet on the Houston Rockets. They lost and then I proceeded to deposit 3.0 BTC, which I took a bet on Tsitipas tennis and won with plus odds. However, once that bet won, before I even attempted a withdrawal, I receive a message from the security team asking for full documentation, photo ID, bill statements, etc.

I went to live chat and explained that I am a USA citizen on vacation in legal jurisdiction. She said this was completely fine so I proceeded to send my documentation. Once they saw I was a citizen of the USA they claimed that I was unable to gamble here flat out, which is never mentioned in the terms of service (3.4 and 3.5 say you are allowed to place bets anywhere in legal jurisdiction).”

Cloudbet Support Not Hinting Restrictions

Cryptoinfowatch confirmed from a chat with Cloudbet support that they actively encourage new users to use the site without hinting that there are restricted jurisdictions.

We asked them why they permit people to use the site without KYC and turn around to ask for IDs after they win games considering that they cannot be bothered if the same players lost.

The support team claimed that they demand for IDs only when they discover that users access their site through VPN. It is not clear if these users accessed the Cloudbet site through proxies even though none has admitted doing so.

Too Many Complaints

The complaints against Cloudbet seems far too common these days as can be surmised with the Reddit comment of Gonzo Picks who wrote,

 “I’ve seen this story way too many times from a lot of people scammed from them. It’s a horrible site to gamble. I’d recommend anyone to avoid them like the plague.”

That may be a bit on the extreme as it is not yet proven that Cloudbet is a scam site. However, it is clearly shady to make the site open to all players knowing that some jurisdictions are restricted.  It simply means that they profit from the losses of people from these jurisdictions while refusing to make payments when they win.

There is no reason why there shouldn’t be a prominently displayed disclaimer on the site warning users not to use the site if they are from such jurisdictions.

Discouraging Winnings

The approach of Cloudbet seems to be aimed at discouraging winnings and withdrawals as seen from the case of another user posted on BitcoinTalk:

“I deposited 5btc into cloudbet, without using any affiliate programs or anything like that. I just wanted to do some sports betting.
After using the service for a few weeks, I withdrew my balance and kept 0.05 btc in the account.

One night I decided to do some live betting on tennis, and went on a hot streak – ran the account up to 1.7btc. Cloudbet quickly proceeded to lock my account and requested documents for verification of my identity (defeats the purpose of using online services and BTC, but ok).

I quickly provided those documents, as I wanted to withdraw my funds and use them for other purposes. It has now been 6 days, and the only response I am getting from them is “it is still being reviewed by player safety team”, and of course that this is being done to ensure MY safety. Obviously that is a bogus excuse for wanting to screw me out of my money.”

The complaint further accused the company of scamming users,

“I will be filing reports in numerous places until this gets resolved and I have my 1.7btc returned to me.
I wish I have read up on their SCAM earlier and wasn’t stuck in this situation, but you live and learn. I will be uploading screenshots of the emails and the live conversations shortly.”

Cloudbet Needs Putting Its Acts Together

He who comes to equity should come with clean hand. It is obvious that Cloudbet is profiting through the exploitation of their term of service knowing that there are many users that wouldn’t notice terms. By cutting down on payments using flimsy excuses they are obviously making more profit.

The company should place the terms prominently on the site where every user can see it and know the risk of using the site. It is unethical to hide under the TOS and defraud people. Perhaps a timely warning for all potential users of the site is that they should be wary using it just because the support team said so as they do not seem to have full details of the company policy as they sometimes give contradictory information.

Payment Assured By Managers

Some of the users that complained about Cloudbet said that they even contacted some senior manager named Ronnie before playing the game and was assured they would be paid.

Now having blamed Cloudbet for its shady operation of ignoring losers and blocking winners, every player from unapproved jurisdiction should stop using the site. Bear in mind that you’re taking a risk by using it when there are many other betting sites you can safely use.

Is Cloudbet a scam?

Well…there’s no straightforward answer to that. Every one planning to use the site should know there are risks involved. Interestingly, the manager named Ronnie has clarified that what Cloudbet does is nullify bets placed from restricted jurisdiction and not keep the player’s deposit.

So Cloudbet is not really a scam site but has been in the eye of the storm because some users unknowingly use the site unaware that they’re not permitted to.

I usually advise people to invest their bitcoins in good mining services instead of gambling them away. If you’re interested in my recommendation, why not use it?