I have not commented in any of these threads due to the massive number of people calling me a Dean puppet when calling out dodgy casino startups, but I have been asked to comment on this by the few reasonable people in the community that I speak too. People who are represented on both sides of the fence. As someone who runs a serious business and who has completed both sale of shares and capital raising and also invested in a few capital raising opportunities on the Australian listed securities, I understand how this would be confusing to those folks who just want to invest bitcoin in something safe and can’t see why Dean is profiting from this. I’m going to try and explain the concept here and what Dean needs to do in planning.

As we know, there is nothing purely safe in bitcoin and even the biggest of legitimate companies get robbed. And a bitcoin casino comes with its risks too. BetKing has proven itself to be secure. The persona behind BetKing has proven to be trust worthy and anyone making claims to discredit this long standing is just taking a grudge. Probably due to Deans zero tolerance to trolls (yes he is a grumpy bastard, but that’s ok, steve jobs was a prick too and lots of people invested in his vision). Regardless, I do not see this as a scam to take 2000BTC. This does not look like the case here, he is simply looking to capitalize on the brand he has built up over the last few years. Like it or not, but Doog removing bitcoin from just-dice had people seeking new places to put money and at the time there were many scam dice sites pop up to take advantage of this. Dean ended up with a good chunk of the leftover funds and has proven that he can be trusted with them. But you can make your own minds up and either put your money into other ventures and just watch BetKing play out (no pun intended).
Now for the investment itself. There is two ways to propose this, one is to sell 30% of the shares in an IPO and the current shareholder gets the sale of shares – this is how the real markets work. You build a business and you exit by selling, you don’t give that money back to the investors by putting it into the business, you take it as your return on the risk and hard work you put in. That’s just how selling something you own works. If the market agrees with your price, you sell, if not, you don’t. It’s really that simple. If you don’t agree with the price, don’t buy in. If you do agree, then buy in. There is no reason to discredit anyone for their decision to sell something they own.  

The second method is to raise capital in the business by diluting current shareholders with more shares. Commonly the current shareholders have a chance to buy these shares at a discount and if they refuse, non shareholders can buy in at a price depicted by the company – dean offered everyone a chance for a discount since he has no other shareholders other than himself. What happens is, these newly created shares go into the total and you end up with dilution. Shareholders also end up with more capital in the business because this capital sits on the balance sheet. And also, capital raising doesn’t have to meet any minimum, they just create the number of shares needed. Some cases a capital raising can be oversubscribed and the company creates more shares to take advantage. Simple to understand.  
Now let’s look at this case, since it is a different case to a standard business. To operate with high returns, the casino needs a bankroll, without crowd funding, the bankroll is 0. BetKing has always had a 0 balance sheet. Distributions are paid immediately and nothing is banked. But the brand has value in its ability to recognize a return on investment. i.e, if I invest, I will immediately start receiving a substantial return. My shares still hold value too, and I could sell that to someone who whats to also hold shares and receive the same return. Shares are valued based on equity + profit*. It’s not depreciated to 0 value just because you own shares in a business with a balance of 0 (it’s all about potential returns). You price the shares via what’s known as a Price to Earnings ratio (P/E). 10 times is a normal number, 20 times is common for sustainable business, and 30+ times P/E is common for globals like apple and microsoft. And this changes based on how much you get just sticking your money in the bank and what the expected future earnings look like.

The current shareholder could now choose to dilute held shares and raise capital in the business by issuing more shares. Or just sell the shares and take the proceeds as a sale of shares. In the case described, Dean is selling 30% of his asset to the public. He would then take 100% investment as his own. Now comes the question of bankroll. In this case there is still 0 on the balance sheet, and this needs to be a positive number to ensure the casino can take bets. Dean could elect to loan the invested funds to the bankroll for a fixed term and all generated profit stays in the bankroll. And hopefully over time the bankroll pays off the load. Shareholders then retain that value in their shares but don’t see any instant returns.

If Dean chooses the capital raising via a dilution of shares, he will still own 70% of the total company value, including what’s on the balance sheet and in the case of 2000bitcoin, he would own 1400btc in equity. It means that the company will be able to use this equity and pay distributions when it sees the bankroll being too high. Thus giving investors an instant return on investment. Or it could keep all profits in on the balance sheet and the share value would increase due to increased equity. Either way, shareholders are seeing value.

Whichever way Dean decides to slice it, the result doesn’t change, shares in the business are worth what people are prepared to pay. And if you think it’s not worth it, then don’t invest.

I was asked if I am investing in it. I will not be investing in it on the initial offer, mostly because I have money tied up in other things (Kim Dot Coms mega2 is one thing I pounced on). I would never invest more than 1% of total net worth into bitcoin related investments anyway, because I see they can generate big returns but also have a high-risk profile. Take that for what it’s worth. After some time, I may be in the market of buying shares off other investors that want to liquidate. And I am sure there are others watching this, and thinking the same thing. These shares could indeed command a higher price in the future but I would prefer to wait it out for now till other investments pay off.

I have spoken to Dean and he is working on a more detailed response to this and will decide on the direction. Whichever way he goes, I think it’s great for those with some spare coin to be part of. And those who need liquid capital, should invest in more short term opportunities. Doog has the liquid investment in clams and is also trusted. Now we all have an option to be a shareholder or just a crowd funder in a crypto casino and I can see that as only positive after the past few years of casino scams.