• Blockchain technology ensures fair gaming through the use of Random Number Generators.
• The global online gambling market size was valued at $63.53bn in 2022.
• The online gambling market is projected to reach $95.05bn in 2023 according to data by Statista.

The world of online gaming, often referred to as iGaming, has undergone a remarkable evolution thanks to the integration of blockchain technology.

Blockchain technology, hailed for its decentralized nature, has revolutionized online transactions in the iGaming sector. This transformation begins with the fundamental shift from traditional payment methods to cryptocurrencies, which has made gaming more inclusive than ever before.

Secure online transactions

One of the primary strengths of blockchain technology is its unparalleled security. Financial transactions conducted on the blockchain are virtually impervious to hacking, interception, or bypassing by malicious actors.

In the world of iGaming, where financial stakes are high, this is a game-changer. Deposits and withdrawals are not only swift but also immune to the control of traditional banking institutions. This level of security is particularly appealing to players who wish to maintain pristine bank statements.

In addition to security, blockchain transactions typically incur minimal to zero fees, especially when cryptocurrencies are used. Traditional payment methods, on the other hand, often involve hefty transaction fees. This cost-saving feature is a significant boon for iGaming enthusiasts.

Anonymity

The privacy of players is another compelling advantage of blockchain-powered transactions. When using cryptocurrencies for gaming, players no longer need to divulge sensitive information such as passwords, codes, or OTPs as is often required in traditional banking. This means less exposure to the risks posed by scammers and fraudsters.

Furthermore, blockchain protocols emphasize anonymity as a means to deter money laundering and safeguard players’ financial information. With these measures in place, players can enjoy their gaming experience with peace of mind, knowing their identity and finances are protected.

Transparency and fair play

Blockchain’s transparency-enhancing features have also left an indelible mark on the iGaming industry, ensuring that fairness and integrity are upheld.

At the heart of this transformation is the smart contract feature inherent to blockchain technology. Smart contracts are self-executing agreements encoded as computer programs on the blockchain. These contracts automate transactions based on predefined conditions, thus eliminating the possibility of tampering by unscrupulous actors.

In the realm of iGaming, this translates into a transparent and tamper-proof system for deposits, withdrawals, and payouts. Records are meticulously maintained, reducing the potential for fraudulent activities. Players can independently verify the fairness of game outcomes, assuring them that the odds are not unfairly stacked against them.

Perhaps one of the most significant impacts of blockchain in iGaming is the introduction of fairness. Conventional online casinos offer great sports betting opportunities. However, the notorious “house advantage” often leaves players at a disadvantage. However, blockchain technology, supported by Random Number Generators (RNG), has levelled the playing field.

The RNG ensures that the outcomes of games like video poker, slots, blackjack, and roulette are genuinely random and, therefore, fair.

The tamper-resistant nature of blockchain technology extends to gaming outcomes, making it extremely difficult for third parties to manipulate results. While some online Casino may not fully rely on RNG, players can still verify the fairness of these games through third-party auditors.

Conclusion

The integration of cryptocurrencies and blockchain technology has had a profound and positive impact on the iGaming industry. This transformation has not only enhanced security, privacy, and transparency but has also ushered in a new era of fairness in gaming.

The use of blockchain technology has allowed iGaming companies to expand their reach and cater to a global audience, eliminating the restrictions imposed by traditional payment methods. As a result, players worldwide can enjoy the benefits of blockchain technology, making their gaming experiences more secure, transparent, and rewarding than ever before. 

The iGaming market, which was valued at $63.53 billion in 2022 is projected to reach $95.05 billion in 2023 according to data by Statista. With increasing crypto and blockchain adoption, the value is only expected to grow further in the coming years.

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According to the Sports Betting Global Market Report 2022, researched by the Business Research Company, blockchain is one of the fastest-growing trends in global sport and casino betting. The report points to Bitgame as one of the pioneers of blockchain-based iGaming applications. Bitgame originated in Poland but is now licensed and regulated by the laws of Curacao. Savvy users may not consider this to be a positive sign, with many more iGaming jurisdictions offering much tighter regulatory frameworks including the UK Gambling Commission (UKGC) and the Malta Gaming Authority (MGA). UKGC-licensed operators can be trusted to offer transparent and legitimate bonuses for first-time and existing customers, while those regulated by lesser-known jurisdictions may have fewer restrictions that pose greater security and financial risks to consumers.

Bitgame enables users to deposit and bet with cryptocurrency, as well as its own native utility tokens, Lucky Tokens (LUT). It is said to be live in the US, the UK, South Korea, Singapore and many other nations, although it is strictly unregulated in most of these jurisdictions. With the LUT tokens, all Bitgame users can benefit from a profit-sharing arrangement, whereby free mining rewards are given in LUT for any active bettors on the Bitgame platform.

The Bitgame brand proudly states its “vision” to become a “multi-dimensional entertainment platform”, with some 50 million active users and 1,200 in-house people by 2025. Is this a vision that can actually become a reality or are operators like these going to fail in their efforts to get crypto-based iGaming recognized as a credible entertainment offering?

Why regulators currently steer clear of blockchain-based iGaming

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Although many of the leading iGaming operators are keen to give their customers the utmost in payment flexibility – including the use of cryptocurrencies – the leading iGaming jurisdictions take a rather dimmer view of the crypto landscape. As the UK’s Financial Conduct Authority (FCA) states, the “inherent nature” of crypto assets is one of volatility. Thereby offering “no reliable basis” for valuation against other real-world assets.

That’s the real issue that operators face with cryptocurrency. With the wild bull and bear swings in the crypto markets, one day a cryptocurrency could be worth $1 and the next it could be worth only $0.75.

The other big issue for established regulators like the UKGC is its commitment to tackling cyber fraud. Its use of the Know Your Customer (KYC) framework is part of its compliance process for licensed operators. KYC is designed to ensure operators can be confident that their customers can afford what they are wagering and that the funds aren’t derived from ill-gotten activities. Given that the primary benefit of blockchain-based assets is anonymity, this is at odds with the concept of KYC.

Another major reason that the UKGC and other well-respected iGaming jurisdictions opt to steer consumers away from using unlicensed and unregulated operators is the lack of player protections in place. All UKGC-licensed operators must comply with regulations which state that responsible and safer gambling tools and provisions must be active and made available to all vulnerable customers. Unlicensed operators generally opt against implementing stringent player protections, nor do they direct or encourage bettors to self-exclude from their platform if they appear to be in danger of losing more than they can afford.

Unlicensed and unregulated operators like Bitgame also have no pressure to deliver best-in-class products and services. Licensed operators are required to offer first-rate product quality and to ensure the fairest possible terms on gameplay and bonuses. This goes hand-in-hand with the lack of consumer recourse too. Unlicensed sites cannot be penalized or charged by consumers for their poor products or customer service, so with no definitive ombudsman to oversee them, it’s easy to see why the unlicensed sector has been described by many industry analysts as the “Wild West” of the iGaming scene.

The reality is that until cryptocurrencies achieve broad-based acceptance from iGaming jurisdictions, blockchain operators will be forced to operate unregulated, which plays neatly into the hands of licensed brands that can continue to use their compliance as a yardstick against the likes of Bitgame and co.

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