While once niche, cryptocurrencies like Bitcoin and Ethereum are becoming increasingly commonplace in gaming and iGaming. The secure and decentralized nature of crypto makes them a popular choice for payment at a growing number of online casinos and sports betting sites. A third of the world’s population is estimated to enjoy a wager, and crypto offers a secure and efficient payment option.
Online global gambling is huge
The global market of casino and online gambling is estimated to be worth US$263.3 billion. Many people choose to play with cryptocurrencies as they can do so anonymously. It can be advantageous if they live in territories where gambling is not allowed or for any other reason that they do not want to reveal their identity. In regulated markets, online casinos have to carry out security checks on customers to verify residency and age. Some people will choose to play without these.
The downside to this is that there is less protection for players, particularly if something goes wrong. However, most people who dabble in crypto on either a small or large scale are probably quite open to risk. Cryptocurrency values can be so volatile that many critics regard them as a gamble themselves.
Regulated markets are more challenging for crypto
As more and more markets legalize online gambling and create regulated environments, players have a choice of secure ways to pay and play. There is no doubt that the blockchain behind crypto makes transactions extremely safe, but as has been noted, other factors can affect the currency’s value.
Therefore, many players prefer to play at sites covered by local regulations in countries and states where online gambling is allowed. When casinos use real money, customers can make secure deposits into their casino accounts by choosing from a range of payment options. The paradox is that in order for players to have the backing of the regulator, they need to play on real-money sites, which some argue are inherently less secure than crypto ones. However, this is very much still up for debate.
Cryptocurrencies benefit players and operators
Many sites and gaming platforms offer cryptocurrency options so that players can place a bet from anywhere in the world. They usually offer lower transaction costs than traditional payment methods, and there is no need to exchange currencies. Players get to keep more of their winnings if they are lucky.
Even though the house always wins in the long run, the lower transaction fees also benefit players because costs to online operators are also lower, meaning they can offer more competitive odds. In addition, transactions are incredibly fast and secure as transactions are processed without any delay.
Traditional currencies can be subject to delays, particularly when it comes to money being deposited back to a player’s funding source. It can sometimes take days for fiat currency winnings to be paid out and returned to the player’s bank account. Because cryptocurrencies use blockchain technology, they are almost impossible to hack, which makes them an excellent option for online platforms.
What is holding crypto back?
Gambling and gaming usually need players to deposit money, and crypto is an increasingly favored way to pay, but market penetration is still relatively low, particularly in regulated markets. For example, the UK has one of the longest-established regulated gambling markets but its Gambling Commission requires all gambling companies operating in the country to hold a valid license. UK gambling law does not currently extend to cryptocurrency-based operations.
A recent gambling review did not even look into crypto casinos or give any consideration to their regulation. This leaves a gap in regulation and means crypto casinos operate in an area of legal uncertainty. Their unregulated status effectively makes them illegal in the UK. So, despite being technically safer, they are potentially riskier for users and operators alike.
Perceived benefits
Regardless of the legislation, cryptocurrencies are becoming more commonplace in gaming for the following reasons:
- Instant transactions – Players can access games faster when paying with cryptocurrencies because using crypto to fund an online account eliminates the middleman. The stake goes directly from the crypto wallet to the casino account and is ready to play with without delay.
- Play from anywhere – playing with cryptocurrencies means players can play from wherever they are. There are no borders, restrictions, or exchange problems. Players do not need to provide any personal information or verify their email; the blockchain is the security. Unlike many real-money casinos, there are no limits, and play is not restricted by location.
- No hidden costs – Bitcoin, Ethereum, and other cryptocurrencies are transparent, and there are no hidden fees or unexpected transaction costs to look out for. Money moves instantly, and there are no delays.
- Safety – security is always a concern when transacting online, and some online gambling sites are notorious for being unethical. People are very wary of being scammed, and trust can be a real issue. Blockchain helps to prevent any unauthorized trade of your digital assets and keeps them protected.
- Increased revenue – accepting cryptocurrencies can help gaming companies reach new markets and monetize in-game purchases.
Generational Gaming
It is understood that 55% of millennial gamers in the USA own cryptocurrency, and 80% consider using, or have used, cryptocurrencies to make gaming transactions. A study of 1000 gamers found that 75% favored cryptocurrencies and described them as a significant benefit, citing the ease of use, reduced exchange rates, and heightened security. It becomes the norm when you are in a community where everyone is using crypto. That is likely how widespread acceptance of crypto will come about. Rather than it being imposed from the outside, its use will balloon from within. As digital transactions have largely replaced cash ones for many younger consumers, crypto use in gaming will follow a similar pattern.
Players might have been skeptical initially, but once they start using them, they will probably be reluctant to return to fiat currencies. Global gaming communities can play and trade without borders by using crypto. The adoption of cryptocurrencies is likely to be by evolution rather than revolution.
