The iGaming industry is doubling down on cryptocurrency and blockchain technology in a big way, in a bid to attract the next generation of millennial gamers. Back in 2012, the iGaming sector was said to make up almost $34 billion of total revenues in the real-money casino industry, which hit $417 billion in total. Wind the clock forward to 2017 and the iGaming sector generated over $47 billion and estimates predict it will command revenues of almost $60 billion by the turn of the next decade – almost 100% growth in eight years.
Combine this with the rapid proliferation of cryptocurrencies across a host of industries – including iGaming – and it’s clear to see why these digital assets are proving so valuable to online casino platforms. In fact, the number of iGaming operators that refuse fiat currency as a form of deposit in favour of cryptocurrencies such as Bitcoin is escalating fast, despite Bitcoin’s recent volatility. The low cost of cryptocurrency transactions is one of the major boons for the iGaming industry, with no need to pay for third-party payment processing services.
Many iGaming brands already accept Bitcoin as a legitimate form of currency to play with in online slots and table games. Some will even reward Bitcoin depositors with free spins, deposit bonuses and ongoing weekly promotions. The decentralised nature of cryptocurrencies such as Bitcoin is also a huge appeal to iGamers. Owners of Bitcoin are empowered to look after their own digital assets, with no third-party or institution able to block or confiscate their Bitcoin. The raft of cryptocurrency exchanges also makes it easy for iGamers to quickly convert their crypto winnings into fiat currency, whenever they wish.
Blockchain, the technology that is used to underpin cryptocurrencies such as Bitcoin, is also being utilised by several iGaming operators in a bid to address the key issues regarding security, fairness and transparency in the iGaming industry. In order to obtain regulatory approval from the likes of eCOGRA, some iGaming operators are choosing to place their random number generators (RNGs) within a 100% decentralised blockchain. Too often, iGamers are losing trust in their favourite operators as they feel that the RNGs that trigger jackpot prizes on slots and dealer outcomes within table games are easily exploitable. The implementation of RNGs within blockchain’s transparent architecture will allow players not only to view them in action, but play safe in the knowledge that the RNGs cannot be tampered with.
Blockchain is also revolutionising the way in which iGaming platforms operate. The use of ‘smart contracts’ helps to automate transactions and tasks between stakeholders, such as the relationship between the operators and their customers. Each smart contract is coded to incorporate an “if this, then that” formula. This is increasingly utilised within iGaming table games. For instance, the formula of the smart contract between a player and operator will state “if player’s Blackjack hand defeats the dealer’s, pay out winnings”. Similarly, in Roulette, “if the ball lands on the player’s colour, pay out winnings”. Funds tend to be held secure in Escrow in the meantime and are only released when the formula has been met.
So, what have cryptocurrencies got to do in order to ensure they remain a key part of iGaming’s long-term future? Crypto-based iGaming operators need to show more respect for the regulation of online casino games. The vast majority of crypto-based online casinos are wholly unregulated. This is either because their software developers use blockchain-based “provably fair” RNGs that they believe are just as – if not more – transparent than a traditional online casino; or they merely insist that such regulation is a barrier to market entry. To place provably fair gaming on a pedestal and to ignore industry regulations are both poor approaches to cementing cryptocurrency-based casinos within the world of iGaming.
Instead, crypto casinos should acknowledge that regulators exist not to penalise the operators themselves, but to act as guardians for players; overseeing responsible gambling measures. This alone would help crypto iGaming platforms gain respect and trust throughout the industry. The sooner crypto casinos shed their ‘wild west’ tag and adapt to market regulations, the quicker they will mature and thrive.