Derek Stevens’ office is on the first floor of The Golden Gate Hotel & Casino in Las Vegas, which affords him the opportunity to frequently step out and chat with his guests about their accommodation needs and requests. Last year, the hotel co-owner and CEO repeatedly kept hearing the same question from his customers: “Do you accept Bitcoin here?”
Stevens, who at the time only had a casual knowledge of the increasingly popular digital currency, couldn’t yet give his guests what they wanted. But after making an innovative move that has gained industry attention, now he can.
Last month, The Golden Gate and The D Las Vegas Casino Hotel—both co-owned by Stevens—became the first casino properties in the United States to accept Bitcoin as a payment method. As more and more businesses begin using the crypto-currency that launched in 2009, Stevens said the time was right to join the movement and test its viability in hotels.
“It got to the point where my management team and I were all looking at each other and asked ourselves, ‘Wait, why wouldn’t we accept Bitcoin?’ We determined it made a lot of sense for us,” Stevens says. “I thought considering the fact that our hotels are located in downtown Las Vegas—which has had such a resurgence in the last few years, with tech companies like Zappos setting up here—there’s an awful lot of young, tech-oriented people with a high probability of having it on their phones.”
The idea behind Bitcoin is simple: It’s a global, decentralized, digital currency that allows two parties to exchange money instantly with each other without paying any of the transaction fees that normally come with using credit cards. “There’s no middle man,” says Austin Alexander, deputy director for external relations at Bitcoin Center NYC, an open trading exchange for the currency. “There’s no bank that can step in between you and say your transaction isn’t allowed.”
For that reason, Bitcoin poses a significant threat for banks, which risk losing millions of dollars in transaction fees. “Those credit card fees are such an important part of their business model,” Stevens says. But after carefully researching the economic impact—and any potential risks—that implementing the technology would have on his own properties, Stevens signed on. “I’m a pretty conservative guy when it comes to business, and I really thought the way we set up the structure at the D and the Golden Gate allowed us to mitigate a lot of the risk.”
Once customers have bitcoins—available to purchase online and at various exchanges—they can use them at five locations across the two properties, including both hotels’ front desks, two restaurants, and the D’s Gift Shop—bitcoin is not yet permitted for gaming usage in Nevada casinos, according to the Nevada State Gaming Control Board. At checkout, guests who have Bitcoin installed on their smartphones simply open up their digital “wallets” to pay, scan them at tablets installed at each cashier, and complete the transaction within seconds.
To process the transactions and convert them to U.S. dollars, Stevens and his team determined that his properties would use a service called BitPay, which helped customers and merchants transfer more than $100 million in 2013. “It really wasn’t much of a software adjustment,” he says. “And in terms of equipment, you’re really just talking about a handful of iPads.”