Exchange rates are changing constantly owing to the state of the global economy, politics, and even market mood. For most individuals, these changes may only come to the forefront when travelling abroad or buying something international. However, in the case of international online gambling, such currency fluctuations can be crucial to the currency value concerning gamer’s winnings.
The Hidden Factor in Online Gambling Returns
In an online casino, most players focus on the game portfolio or the percentage of bonuses in addition to payout ratios. However, currency exchange rates are often ignored in regard to withdrawal periods which is an imbalance that can greatly affect the amount of currency a player gets compared to the winnings they receive. This reason can cause unfavorable surprises when bankrolling the accounts because the balances may be significantly lower than expected due to currency conversions.
Take, for example, the case of a player from Australia depositing AUD 1,000 into a USD casino when the exchange rate is 0.70 (1 AUD = 0.70 USD). The casino shows their balance as USD 700. After some successful play, they’ve increased their balance to USD 1,400. Now, they are satisfied as having doubled their deposit and are requesting a withdrawal. However, if during their session their USD 1,400 were to convert back to AUD 1,867 instead of the 2,000 they would expect based on the original rate because the Australian dollar has strengthened to 0.75, the conversion would have been less favorable.
Timing Withdrawals for Maximum Profit
Players of this nature often employing this strategy of timing their withdrawals to maximize gain based on movements in the exchange rate, depending on how favorable market conditions shift. Unfortunately, this requires extensive knowledge of the currency markets, as a set strategy of monitoring precludes constant access to funds. Unsurprisingly, this approach carries risks as well, as better conditions might worsen currency rates while waiting.
Some regular online gamblers even claim that they check exchange rate forecasts before making large withdrawals. One gambler told me that he once delayed a 5000 euro withdrawal for 3 weeks waiting for the Euro to appreciate. When he did convert his winnings, it turned out the currency conversion paid out 3% additional—essentially hassle-free money for simply waiting and knowing how to capitalize on currency mechanics.
Multiple Currency Accounts: A Hedge Against Volatility
Some online casinos allow players to maintain their user account in multiple currencies. This service can act as a protective measure against players’ funds being subjected to fluctuation risks, enabling gamers to hold their money in the currency that they think will increase in value or safeguard the funds in the most unfavourable position.
As an example, if you think that the USD will appreciate against the Euro in a few months, it makes sense to keep your casino balance in USD so that your winnings are protected. On the contrary, if the expectation is that the Euro is going to outperform the US dollar, then converting the balance to Euros is a better option to maximize profits over actual gambling wins.
The Compounding Effect on Regular Players
The implications of changes to the exchange seem to grow stronger with frequent players who make numerous deposits and withdrawals. Minor percentage shifts in exchange rates may seem insignificant on one off transactions, but when summed over multiple transactions throughout the year, they can lead to noteworthy figures.
This is especially true for high rollers who move massive amounts. A professional poker player withdrawing $50,000 a month might, just due to the timing of exchange rates, thousands in the value they take home.
Transaction Fees Add Another Layer of Complexity
Aside from the aforementioned effects associated with the exchange of rates, a player needs to look out for the additional fees that come with the converting of currency. Payment processors and some banks, for example, add on conversion fees ranging from 1-3%. This only reduces the profit left over when withdrawing from gambling sites.
Players do this by switching to multi-currency e-wallets or even cryptocurrency which offer lower rates than most banks. Although this requires more work upfront, they ultimately save a significant amount.
Conclusion
Changes in exchange rates are in most cases considered a non-core aspect of the economics of online gambling. This usually impacts the true value of one’s winnings. By understanding and employing strategies concerning currency movement and optimizing withdrawal timing, a player can enhance their profit prospects well beyond what would be achieved at the gaming tables. Though the currency markets are beyond our control, the knowledge and understanding of these markets relative to our gambling returns is another advantage alongside game strategy and is predicated on deeper financial literacy.
