Should All Online Casinos Consider Integrating Cryptocurrency And Blockchain?

The impact of cryptocurrency and blockchain integration in the casino industry is less prevalent than in other sectors like finance. Nonetheless, blockchain adoption in gambling is gaining some traction, especially as the advantages of this integration become more popular.

According to research, crypto gamblers spent more than $6.3 billion on bets in Q1 2022, a 116% increase from the $6.3 billion recorded in Q1 2021. These numbers are expected to rise as crypto adoption increases and more casinos adopt blockchain technology.

Owing to blockchain, crypto casinos can offer players a lot more perks than traditional establishments.

According to sports betting specialist Geoff Kukard, some of the best crypto betting sites attract players with exciting offers like high rakebacks, affordable transaction fees, special odds, and up to 200% in bonuses (source: https://www.business2community.com/cryptocurrency/best-crypto-betting-sites).

By adopting blockchain, crypto casinos can easily retain existing users and attract new players by offering several advantages.

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Advantages Online Casinos Enjoy From Integrating Blockchain Technology

Crypto casinos can set themselves apart from traditional platforms by leaning into blockchain technology to provide players with the following:

Transaction Speed: Blockchain transactions are fast, almost instantaneous, when there is no network congestion.
Reduced Fees: Most blockchains charge low crypto transaction fees, possibly because of the network’s decentralized nature. The absence of intermediaries that usually bloat transaction charges ensures that all fees paid are necessary. This way, the amount eventually deposited into player accounts is the same or slightly lower. On the other hand, traditional casinos charge higher transaction fees because of payment processors and other financial intermediaries.
Ownership: Through blockchain technology, players can truly own some of the in-game assets at an online casino. The operator can represent assets like collectible cards, avatars, and in-game skins as non-fungible tokens (NFTs) that are tradable on the blockchain. Users can earn these assets after achieving specific milestones or purchase them for a leg up in the game. This feature also allows owners to earn by selling their NFTs for crypto.

On-Chain Wagering: This is simply the process of betting on the blockchain. Instead of casinos only using blockchain for crypto deposits and withdrawals, these platforms can power on-chain wagering so that player bets are recorded on the blockchain.

On-chain wagering is an automatic process powered by smart contracts that immediately pay earnings to the winner’s wallet. In the same way, the smart contracts automatically credit the casino when the player loses.

The many benefits of blockchain integration are also crucial to the casino operator. For instance, on-chain wagering allows the casino to pay attention to other functions because basic tasks are already handled by smart contracts. In general, the blockchain also reduces the risk of fraudulent transactions.

In addition, using cryptocurrency ensures that casinos can appeal to a younger audience. According to 2022 data from Pew Research, 43% of men between 18 and 29 have traded, invested in, or otherwise used a cryptocurrency.

This is a budding audience online casinos can target by adopting cryptocurrency and blockchain technology.

Crypto Casino Problems

Unfortunately, online casino operators must consider that the perks of crypto and blockchain integration come with a few challenges. Some of the most common include the following:

Regulatory Problems: Crypto regulations are tricky in most jurisdictions. Operators have to combine online gambling regulations with rules for handling digital assets. Some jurisdictions require operators to obtain specific licenses to handle crypto or keep funds in wallets on behalf of clients.

For instance, New York law requires virtual currency businesses to get a BitLicense from the Department of Financial Services. Unfortunately, the licensing process can be tedious, sometimes worsened by governments deliberately looking to stifle the crypto sector.

Privacy and Anonymity: This is an advantage to players who prefer to enjoy their games privately. Since most blockchain transactions are anonymous, players are assured of confidentiality, which comforts high-net-worth gamblers with large bankrolls.

Unfortunately, anonymity could be problematic for the operator if criminals use the platform to transfer illicit funds.

Price Differences: Unlike fiat currency, the prices of cryptos may vary between trading platforms and exchanges. Players may deposit funds expecting an amount of Bitcoin, for instance, and get a lower figure on the casino if their purchase price is more expensive.

Players worrying about price discrepancies could eventually feel discouraged and avoid crypto casinos altogether.

Technical Complexity: Playing at a traditional casino is much easier. Most users understand that they can deposit fiat to a crypto casino, wait for the funds to reflect on the player’s account, and then start betting.

However, introducing cryptocurrencies requires players to learn about the blockchain and crypto transactions, which takes away the leisurely feeling people get from visiting a casino and playing games.

Should Casinos Add Cryptocurrency Support?

Allowing users to deposit crypto could expand a casino’s audience and attract crypto enthusiasts to the world of betting.

It is also an excellent way to contribute to the general adoption of crypto, which could improve network liquidity and stabilize prices, eventually reducing the risk of volatility for players holding their bankrolls in crypto.

Casinos looking to add crypto support can begin by ensuring compliance to avoid regulatory scrutiny. These establishments should also create free educational content to simplify the onboarding process for interested newbies.

Disclaimer: The above references an opinion of the author and is for information purposes only. Never gamble for more than you can afford to lose. Gambling can lead to a serious addiction. Gamble responsibly.