Exchange-rate risk is that the value of your casino balance in euros changes without your having played a single round. A hundred euros held in bitcoin or ethereum can be ninety or a hundred and ten a week later.
Two places where it bites
While playing. If you hold the balance in a volatile coin, you are really playing two games at once. Over a longer session the rate movement can exceed the effect of the house edge many times over — in both directions.
While waiting for a withdrawal. A win that was a hundred euros at the moment of the request can be ninety-five three hours later. A fast withdrawal is therefore not only convenience but also risk management — see the fast-withdrawal list.
How to avoid it
Hold the balance in a stablecoin. USDT and USDC are pegged to the dollar, so the value holds. For an Estonian player a small euro–dollar rate remains, but it is many times smaller than bitcoin's swing.
The bonus calculation changes too
If the wagering requirement is stated in dollars and your balance is in a coin, the target moves with the rate. With a stablecoin the requirement is a fixed number.
The tax aspect
A gain arising from exchanging crypto-assets is taxable in Estonia and that is a separate matter from a gambling win. If in doubt, consult a tax adviser — see also the crypto payments page.
An example in euros
Suppose your casino balance is 0.002 BTC and the price of bitcoin is 50,000 euros. The balance is then 0.002 × 50,000 = 100 euros. If the price falls 10%, the same balance is 90 euros without you having placed a single bet. A dollar-pegged coin behaves differently, but not completely so: 100 USDT is 100 / 1.10 ≈ 90.91 euros if the euro-dollar rate is 1.10, and 100 / 1.05 ≈ 95.24 euros if the rate is 1.05. The difference is about 4.8%, which is smaller than a single strong day for bitcoin, but not zero. The official euro reference rates are published by the European Central Bank.
What exchange rate risk is not
It is not the casino's house edge and it does not change a game's RTP. It is a separate bet on the exchange rate, which you made when you chose a volatile coin to hold your balance. It is also unrelated to a game's volatility: the latter describes how evenly a slot or an originals game pays out, the former how much the value of the balance changes independently of the game. Game volatility is also explained in an article on freespin.ee.
Practical rules
- Decide whether you want to hold crypto or to play. Holding long term is your own investment decision and belongs in a wallet of your own, not in a casino balance.
- Make the deposit so that there is no conversion between the coin, the network and the bonus terms that adds an exchange rate on top.
- If you use a stablecoin, also judge the risk of the stablecoin itself. See the post stablecoins in casinos: USDT, USDC and depeg risk.
- If you notice that you check the rate more often than the game itself, it is time for a break. Free help is available on 15410.