Online gambling is rapidly becoming one of the fastest-growing businesses in the world. Its popularity has consistently gone up since the mass adoption of the mobile Internet. In societies where gambling is allowed, it is one of the major economic contributors.
Problems with the gambling industry
Over time, online gambling has earned a bad rep for being unfair. The frequency of players losing more than winning is very high, which happens to be the revenue model for the casinos. Users don’t trust online betting portals, and they see them as a money-sucking vacuum. Some believe there’s trick up casino’s sleeves that increase a player’s winning and losing opportunities. Many also reported having been charged ridiculously high percentage as commission, which, again, is a significant disadvantage.
Unsecured Personal Data
The Gambling industry forces people for a KYC. Meaning a user will have to submit valuable personal information to signup. The information is kept stored in centralized databases that are not secure leaving information vulnerable. What pushes the matter further is that this industry has always been in controversies surrounding data breaches. Stolen data could be used maliciously for various harmful purposes.
Can Blockchain Help?
Blockchain isn’t a magic spell that’d transform the gambling world and turn the winning odds in a player’s favor. What blockchain can do is record all the games, and the placed bets and the outcomes. Even the amount that was won and the amount that got paid to the players, the remaining balance, every transaction history can be checked, reviewed, and confirmed. This ensures fairness throughout the game and that nothing is rigged to favor one side.
Ever since blockchain made its debut, industry experts started seeing this tech as something people would trust. Thus, the gambling world can benefit from a decentralized network and distributed ledger technology as trust is something it lacks. The DLTs will let users see that casinos are playing ethically.
Business to Peer
If you send a wire or any other form of payment to a business, you usually have to do the transaction with no intermediary or third party. Blockchain technology cuts on wait times, and reliance on a third party and transactions simply and safely can get sent through. A good example is Bitcoin where transactions’ legitimacy is verified by miners, which is an automated system with no third party holding a claw on your money.
Accessibility and Reliability
With blockchain in the scene, more and more users will come into the world of legal gambling, and with banks having no affair, the whole process is going to be worry-free. However, if a state or country has illegalized gambling, users mustn’t be involved in it.
In the past, there have been situations where casinos used some scams to trick their customers and steal from under their noses, this caused unreliability among users/players. Blockchain eliminates fraud and the fear of being cheated. And this is possible through the use of smart contracts that verify records on a shared ledger that cannot be manipulated. This approach competently increases transparency and eliminates concerns over fairness in the calculation of odds and regarding the protection of money placement.
But even with the blockchain, if an online casino is directing games, a user can play and bet on, and what games they can’t, the system is not decentralized, which is an indication of restricted accessibility. A casino must provide users with the opportunity to add more events they can bet on, and it shouldn’t be limited to sports only, something possible with the adoption of blockchain.
Blockchain in gambling opens the way for secure cross border/international payments in both fiat and cryptos and with low fees. Since its implementation, financial transactions for games and gambling online have been made faster and easier. Deposits and withdrawals are made much rapidly with quicker turnaround times. Plus, it has led to an improved customer base, since payments can be done using a variety of cryptos, and bitcoin in particular. There are many businesses as well, that have secured their reputation with the help of this tech.
Longer-term i.e. within five years, blockchain-enabled gambling will be massive and will probably rival traditional iGaming as we know it today. It’s not going to be traditional casinos with lots of slots games, it’s going to be skins, loot boxes, skins gambling games and E-sports and so on. In other words, skins gambling i.e. loot boxes, which are controlled by the game publishers, will end up migrating onto the blockchain and into open marketplaces/ecosystems and you will then have a massive explosion in online gambling.
For obvious ethical and legal reasons, blockchain is imperative. But not to forget there are bigger concerns lurking around the corner. Money laundering is one of the biggest concerns, then comes prevention of gambling among minors and barring people, hailing from a country that restricts gambling from gambling. All this requires careful and thorough planning process to include features that abide by country regulation and do everything to promote fairness and help mitigate risks.