Blockchain has revolutionized a lot of industries from healthcare to finance, thanks to its increased security, greater transparency, and its innovation potential. One industry in which blockchain is gaining prominence is in the online casino industry where it offers the same benefits of transparency, security, and innovation.
The online casino industry is already a behemoth, worth tens of billions of dollars a year, and this is set to increase as crypto casinos continue to rise.
Crypto Casinos
A crypto casino accepts and offers cryptocurrency payments either instead of or in addition to fiat currency payments. These online casinos attract players from around the world thanks to the anonymity and privacy they offer. They retain customers with substantial jackpots, fast payment processing times, and gaming transparency.
According to gambling expert Vlad Grindu, crypto casinos also accept players from jurisdictions where online gambling is not regulated, opening up the market to previously underserved players.
How Blockchain Is Used In Online Casinos
Blockchain is a digital ledger that underpins all cryptocurrencies. Bitcoin operates on its Lightning Network, Ether uses Ethereum, and Tether operates on multiple blockchains. Even Dogecoin, which was originally launched on the Litecoin network and started out as a light-hearted take on cryptocurrency, now has its own network.
Digital ledgers are used to deploy and execute transactions as part of smart contracts. These transactions can be financial, but that isn’t always the case. NFTs are recent examples of ledger entries that are not financial in nature. Digital files are created and their information is recorded in a blockchain entry in a process called minting.
Crypto casinos use the blockchain to accept and distribute cryptocurrency payments, but some also utilize collectible NFTs. They can also record player details, game results, and other details on the chain, offering a secure and transparent method of storing data. Recently, a number of casinos have even minted their own tokens, offering additional bonuses and incentives to players that use these native currencies on their platforms.
Blockchain Benefits
The use of blockchain offers a host of benefits to the casino and its players. As more casinos start to implement the technology into their businesses, they find new and innovative ways to use it.
Transparent Gaming
Blockchain is, essentially, a massive digital ledger. Transactions are recorded on the ledger, and while the records are anonymous, they can be tracked. Anybody can access records on the chain, using a blockchain explorer.
Transparent casinos can provide details of transactions which can then be verified by any player or any third party auditors. Transparency is important in any business where money changes hands, but it is extremely important to online casino players. As such, players can verify a casino’s Return To Player (RTP) figures and also determine whether and even when major jackpots were paid out.
This enhances the trust that players have in the casino, and for the casino, it enables them to attract and retain clients. It could also potentially be used to help achieve third-party verification and make the auditing process quicker and easier.
Encrypted Payments
Online casinos invest a lot of money and resources into ensuring the security of their websites. Players deposit money into their accounts, where it is held until it is used or returned to the players.
Although rare with high-quality online casinos, hacks, and thefts do occur. And when they do occur, they lead to the casinos themselves, as well as their players, losing potentially substantial amounts of cash. Cryptocurrency uses highly advanced data encryption when completing transactions. This means that payments sent by players to casinos, and vice versa, are typically safer than those sent using traditional payment methods.
Security is important to casinos because lost or stolen money not only means a financial loss, but it can be difficult to recover from the loss of reputation. It is also obviously important to players who could lose the money they hold in their casino accounts.
Privacy
Blockchain records can be viewed by any third party, but the records only include wallet addresses, rather than any personally identifiable information. Player names and address details are not included and, as there are no bank accounts associated with cryptocurrency payments, no bank details are found on blockchain records.
Not only does this mean that individual payments are anonymous, but it also means players do not have to submit bank account or payment method details. Accounts are funded by directly sending crypto payments and some crypto casinos do not require players to register their personal details like addresses. This offers greater privacy than traditional casinos, which typically require extensive details to be provided.
There are some banks and financial institutions that prohibit payments to gambling websites, either because of government legislation or company policy. Using cryptocurrency bypasses these restrictions and ensures that players are free to wager as much and as often as they like, while also avoiding the chances of having withdrawals frozen by their banks.
Furthermore, crypto casinos can offer opportunities to the unbanked: 1.7 billion people around the world do not have access to traditional bank accounts and banking systems. Cryptocurrency can serve those without this access.
Offshore Betting
While some countries and states have open online and well-regulated online gambling industries, this isn’t true in all regions. Gambling can be restricted, requiring players to join and gamble on offshore casinos.
Anybody can buy Bitcoin and use it to fund casino accounts, which makes crypto casinos more accessible to all.
Casinos that use blockchain and cryptocurrency are not bound by geographic boundaries in the same way as traditional casinos. They can be licensed in countries like Malta and Curacao, and offer their games to players around the world. A crypto payment takes as long as it is being sent to the other side of the world or the property next door.
More crypto casinos will establish themselves in the coming years to take advantage of this widespread reach. As of 2024, there are 5,098 online casino and gambling businesses in the world. This figure will grow exponentially in the coming years thanks to such technological innovations as crypto casinos.
Faster Payments
If you live in the same area as the online casino you use and use the right traditional payment method, you can have funds in your account in a matter of minutes. However, if you prefer to use traditional banking methods like bank transfer or you need to deposit money with a casino on a different continent, payments can take days or even weeks before they clear in your account and are available to spend.
Cryptocurrency payments can be completed within seconds and, depending on the actual currency used can be available in your account straight away. Similarly, withdrawals can be processed within minutes, although this also depends on the casino’s processes and how often they submit transactions.
Lower Transaction Fees
Similarly, when sending payments by credit card or using other methods, transaction fees can be high. The player might have to soak up some of these fees directly, but some, like credit card processing fees, are generally met by the casino.
Even fees paid by the casinos affect players, however, as they take away from casino profits: profits that could be used to enhance jackpots, offer improved bonuses and generally improve the player’s experience.
Fees work out especially expensive on multiple small deposits and withdrawals, as most traditional financial institutes apply minimum charges to transactions. This isn’t true with cryptocurrencies and payments usually cost a matter of cents per transaction, regardless of the transaction size.
Bigger Bonuses For Players
Casinos can greatly reduce operating costs by using blockchain and cryptocurrencies. While this does mean bigger potential profits for the casinos, it also means these savings can be passed on to players.
Some crypto casinos offer higher RTPs, so their players have a greater chance of winning with every wager placed. They might also provide better welcome and loyalty bonuses, and you can also find generous jackpots that are used to lure players in.
The Process
Using cryptocurrency is different from using traditional payment methods. Players need to choose a crypto wallet, fund it by buying crypto on an exchange and sending it to their wallet, and they need to send a payment to the casino’s wallet.
However, much of this process has been simplified as the cryptocurrency market has evolved. Wallets are easier to navigate, there is a large selection of exchanges to choose from, and casinos can offer direct payment links and QR codes to simplify the payment process even further.
For withdrawals, the player accesses their account, chooses the amount they wish to withdraw, and submits their wallet address and the payment is usually received within a matter of minutes.
Conclusion
Crypto offers numerous advantages over traditional payment methods including greater privacy and security, improved payment times, and reduced fees.
Casinos can also use blockchain to improve transparency and help improve their own business processes and, as we continue to further explore the world of blockchain, gambling sites will continue to find new and innovative ways to use this disruptive technology.