The growing relationship between blockchain technology and online gambling has been both promising yet controversial. For many, it marks a shift towards more secure, transparent, and efficient operations. For others, it poses regulatory concerns.
Regardless of the opposing views, it’s clear that the increasingly common Bitcoin casino is making a big impact. The growing adoption of cryptocurrencies in the gambling sector promises a revolution in how transactions and bets are made online.
Blockchain Technology in Online Gambling
Blockchain’s main USP in online gambling lies in three promises:
Security
Transparency
Anonymity
This technology underpins a verifiable fairness in games. By that, we mean it allows for the audit of game outcomes, meaning the immutability of the blockchain is a key benefit for betting records. Nobody can amend them.
The Malta Gaming Authority notes blockchain’s role in enhancing the integrity and transparency of online gambling operations. With smart contracts, blockchain automates payouts based on transparent outcomes, reducing the potential for disputes. This is of course enhancing user trust within the industry. But, only when it’s regulated, and the grey market for crypto is big due to its ability to facilitate anonymous global payments. Visa, for example, can hold massive power over such activities, thereby acting as a (unwilling) regulator.
Cryptocurrency in the Gambling Industry
Cryptocurrencies such as Bitcoin are becoming the currencies of choice in the online gambling world. They can usually facilitate rapid transactions, small processing fees (though this doesn’t take into consideration your own fiat-crypto exchange fees), and a level of anonymity traditional payment methods can’t match.
According to a study by the University of Sydney, cryptocurrency transactions account for a significant portion of online gambling activity, and there’s high potential for this to increase.
However, the volatility of these digital currencies and an uncertain regulatory environment pose challenges. Operators and players must navigate these aspects carefully to fully leverage the benefits of cryptocurrencies in gambling.
Smart contracts are perhaps the real game-changer in online gambling. They automatically execute the terms of bets or games, ensuring payouts are immediate and disputes are minimised. This automation not only streamlines operations, but also significantly reduces the potential for fraud. When risk is minimised, costs are cut for all players.
The integration of blockchain and cryptocurrencies into online gambling raises important regulatory questions. Jurisdictions around the world are grappling with how to frame regulations that protect consumers while fostering innovation. Many are struggling to keep pace, and many users are fine with this. However, when dealing with significant sums of money, players need to treat regulation and licensing seriously.
We are far from seeing what the stable version of crypto gambling looks like. It may become the dominant way, or it may become completely outcasted from major jurisdictions. However, even if crypto itself gets pushed away, we will likely see blockchain and smart contracts play a role.
Blockchain and cryptocurrency are likely set to revolutionise the online gambling industry by offering unprecedented levels of efficiency and transparency. However, this will require further acceptance from the public to use crypto. Until then, we may see a halfway measure in which casinos employ blockchain behind the scenes, but give customers greater choice over their payment method.
