COO, PRESSENTER GROUP
For the past few years, the online gambling industry has flirted with cryptocurrencies but has never truly embraced them. This is something that will change over the next 12 months as consumer demand for the use of Bitcoin, Ethereum, etc continues to rise.
Cryptocurrencies present upsides to gambling operators and can help overcome some of the challenges we face when it comes to key areas such as transparency, anonymity, security and fairness. They can also solve the largest cross-border issue of them all, and that is payments.
In addition to cryptocurrencies, we are quickly moving to a point where NFTs (non-fungible tokens) will be used in the online gambling space for the first time. Again, there are opportunities on the table for operators willing to put themselves at the cutting edge.
Before talking more about cryptocurrencies and NFTs, and how they will reshape the online gambling industry and provide new and unique player experiences, it is worth quickly defining both terms.
Defining cryptocurrencies and NFTs
Most industry stakeholders will be aware of cryptocurrencies, but for those that are not they are simply digital currencies. Popular cryptocurrencies include Bitcoin, Ethereum and USDC and allow holders to purchase items in the same way they would with fiat currencies. But there are some differences. Digital currencies are based on a network and are distributed across a large number of computers. Transactions are verified and recorded on a decentralised system using cryptography and the most common system is blockchain. NFTs are digital assets that represent real-world objects such as art, music, in-game items and videos. They are bought and sold potential to transform the player experience.
For example, an operator could release different types of NFTs that hold different utility values. This could include a VIP-status NFT that would grant the player access to premium services, or a prize that is distributed during a competition with the reward being a share of the casino’s annual profit.
“In addition to cryptocurrencies, we are quickly moving to a point where NFTs (non-fungible tokens) will be used in the online gambling space for the first time”
How crypto and NFTs improve the player experience
Ultimately, crypto has the power to significantly improve the way players deposit into and withdraw from online gambling sites. But they also offer a way for players to become more
involved with the casino.
DOA (Decentralised Autonomous Organisation) casinos could improve the customer experience by leveraging the thriving crypto community through the use of voting. This will allow online through platforms such as Opensea.
While they have been around since 2014, they are becoming an increasingly popular way for consumers to buy and sell digital artwork, as well as a means to buy access to exclusive clubs and even part ownership in a business.
The problems that crypto can solve
Perhaps the biggest impact cryptocurrencies can have is on payments – an area that operators have and continue to struggle with.
Ultimately, crypto provides a number of instant payment solutions when it comes to processing digital currencies, because there is no middleman. It also provides high levels of clarity and trust when combined with a gaming platform powered by blockchain.
Of course, there are some hurdles standing in the way of its widespread adoption by the sector. There is an ongoing debate with regulators and industry leaders trying to tackle concerns when it comes to AML, as for many years crypto has been associated with illicit activities.
But this applies to fiat currencies as well and, indeed, the added benefit of crypto is that every transaction is on the blockchain; which makes the whole transaction history fully
traceable, thus providing greater levels of accountability and monitoring.
Because of this, I believe regulators will ultimately embrace cryptocurrencies once they fully understand the upsides they provide. When they do, they will then roll out more stringent requirements for operators that will make the crypto space safer and even more transparent.
In addition to this, there are several compliant payment providers such as MoonPay and Utorg that are leading the way to ensure all of the necessary compliance obligations operators must meet – such as KYC and source of wealth – can indeed be met.
This means operators can process crypto payments while ensuring they are fully compliant with the requirements set by their licensing jurisdictions and in the markets they operate.
The role of NFTs
Once we see the widespread adoption of cryptocurrencies in the online gambling space, it won’t be long before NFTs hit the mainstream, too. Operators will need to educate players on the value of the NFT they hold; but once they do, they have the operators to give players a voice to influence and be a part of the casino brands they love.
Blockchain also has the ability to deliver a state-of-the-art platform where the player can be the house by providing liquidity to the casino through pools and NFTs. Earnings, rewards and fees can be shared across the user pool, which is an open and unique way of operating a casino.
For me, this is one of the greatest upsides presented by cryptocurrencies, blockchain and NFTs. They allow gambling operators to target new audiences and demographics that would traditionally not engage with online sports betting and casino with an exciting product that appeals to them.
Not only that, but they can be used as a powerful differentiator to allow operators and their brands to stand out in what is becoming an increasingly crowded market.
Of course, for financially savvy operators crypto and blockchain will significantly reduce fees for instant payouts globally. That being said, work still needs to be done to improve the perception of crypto and NFTs, especially when it comes to their use in nefarious activities. This is currently a major hurdle to both becoming more widely adopted. It will happen, but it will take time.
Despite this, there is a new generation of online gambling on the horizon, and I truly believe it will be powered by cryptocurrencies, blockchain and NFTs.