Online gaming is a big business. According to Grand View Research, in 2018, the annual global online gaming market was valued at $48.5 billion, a staggering amount that is only expected to grow as smartphones and the mobile Internet continues to increase, especially in emerging economies.
But even as a sector with an enviable capital base and huge growth potential, online gambling faces issues related to player integrity and trust. Player concerns about the accuracy of odds, the security of cash bets and payouts, delays in withdrawals, and high commissions, not to mention data protection and digital security issues, are just some of the problems holding back the development of online gambling.
The validity of such concerns may be debatable. Still, the impact they have on the reputation of online casinos and, as a consequence, their existence, in the long run, is unquestionable.
The integration of blockchain technology and online gambling has addressed these concerns of online casinos, such as onlinecasinorealmoney.net, and restored the reputation of the industry as a whole, making transparency and controllability key components of the product.
Blockchain technology creates a system in which trust in the casino is established directly between the parties without the involvement of a central authority or intermediary (such as a casino, sports betting operator, or escrow service handling bets). Every part of any transaction made on the blockchain is recorded, stored, and distributed on the computer network, creating a permanent, immutable, and transparent record that can be verified by all parties involved in the transaction.
These characteristics can be used to solve the industry’s internal problems facing online casinos. However, this is only a superficial look at the global potential of blockchain technology, which has the potential to transform the systems underlying the online gambling industry. It is the blockchain that has advantages such as scalability, stability, and security that open the door to a bright future for the online gambling industry.
How the crypto gambling market works
Cryptocurrency gambling platforms work the same way as their traditional online counterparts. The main differences are only that:
- betting is done in cryptocurrencies;
- blockchain allows you to check transactions;
- smart contracts are responsible for paying out winnings;
There are two main crypto-gambling platforms: some work only with cryptocurrencies, while others accept cryptocurrency and fiat currency bets.
Most online casinos are based on Ethereum, TRON, and EOS blockchains. The latter two are more popular because they have lower fees and faster transactions. Among accepted crypto-assets, the most popular are VTC, ETN, LTC, BCH, DOGE, USDT, TRX, EOS, DASH, XMR, and XLM.
In addition to the two types of blockchain gambling platforms, there are two different categories of developers on the market:
- Game developers – they create blockchain-based gambling games that crypto-casinos and other blockchain platforms integrate into their services. For this, the developers get a percentage of each bet – an average of 5-15%. The largest players in this sector are Microgaming, Netent, Endorphina, and Pragmatic Play;
- Blockchain platforms and site engine developers provide the operation of blockchain-based gambling sites. Crypto-casinos can create a blockchain module from scratch, but most often they use off-the-shelf solutions. The developers of such solutions also charge a commission of 5-10%. Key players in this sector: Betconstruct, Casexe, Everymatrix, Softswiss, and TruePlay.
Crypto gambling in the world
The European Union, a pioneer in cryptocurrency legalization, is one of the most advanced regions in cryptocurrency regulation.
When it comes to cryptocurrency regulation, Malta is an industry leader. Some representatives consider Malta’s system to be the best in existence today.
As for the U.S., most states do not have laws prohibiting bitcoin gambling. Nevertheless, many regions are still divided on the issue. The Unlawful Internet Gambling Enforcement Act prohibits “willfully receiving a fee associated with another person’s participation in a bet or wager conducted over the Internet that is illegal under federal or state law,” so all states must consider this.
There are countries where cryptocurrencies are illegal, but cryptocurrency exchanges are legal. South Korea is an example of a country that has successfully implemented such a scheme.
Many governments are steadily moving forward in the crypto sphere. For example, El Salvador became the first country to officially accept bitcoin as a legal currency in August 2021.
The U.K. recognizes bitcoin but imposes certain restrictions on gambling with the cryptocurrency. Casinos that want to offer their players crypto gambling must make sure they can prove the legitimacy of the source of the funds before applying to the UKGC (UK gambling regulator). The application process may seem tedious, but it is necessary to ensure player safety.
Prospects for the crypto-gambling market
The online gambling market is projected to reach $97.69 billion by 2025, with an average annual growth rate of 11.7% through 2030. As the mass adoption of cryptocurrencies increases, so will the share of blockchain gambling in this sector.
Blockchain ensures the transparency of gambling platforms: users can check the balance of the service, the fairness of the algorithm, and the frequency of payments. This makes the crypto-gambling sector more attractive than simple gambling sites. However, blockchain, while it makes the game fair, does not guarantee a win. Therefore, do not play with money you are not prepared to lose.
The future of crypto-gambling
The cryptocurrency’s influence on iGaming can no longer be neglected. For many players, anonymity, speed, and confidentiality are still powerful arguments in favor of bitcoin gambling. Operators that accept only fiat currencies are losing a significant percentage of their loyal audience.
Indeed, cryptocurrency legislation will be actively developing in the next few years. Governments around the world are still fine-tuning their policies on cryptocurrencies, so now bitcoin’s position is flexible and could change.
Operators are now advised to comply with the gambling laws that apply to fiat money casinos in their target jurisdictions. This will help eliminate any potential risks associated with illegal business operations.
