Blockchain in the online gambling industry
The online gambling industry has enjoyed a rapid growth in recent years. Faster Internet speeds and the ubiquity of smartphones have allowed punters to enjoy their favourite pastime online, while introducing the casino experience to a much wider audience. However, the online gaming scene has also developed a bit of a bad reputation among players and the general public, with doubts over the integrity of such services being commonplace.
Blockchain to the rescue
Blockchain technology can be the solution to this problem. The technology is designed to be trustless, a feature of its decentralised nature. Since a public blockchain-based system is not controlled by any one entity, there is no way for a bad actor to take control of the network and manipulate it for their town benefit. Furthermore, the blockchain is basically a public record of digital information so all relevant data is readily available and easy to verify. In addition, some blockchain protocols, such as Ethereum, employ smart contracts – a technology that ensures that a transaction is made when a specified condition is met – which provide another layer of security.
So a blockchain-based casino running on a public blockchain will be able to provide a secure playing environment where fair payouts are ensured by smart contracts and the transparency of the operation is guaranteed by the distributed ledger.
Blockchain’s potential to disrupt the online casino sector hasn’t gone unnoticed. Over the past couple of years, a growing number of companies have been exploring ways to utilise the technology to create new online gambling platforms.
One of those companies is Cashbet, a US, California-based online gaming business founded in 2012. Last year, the company launched an initial coin offering (ICO), as part of its plan to integrate blockchain technology into its iGaming platform. Launched in 2013, the platform allows developers to build their own online gaming sites, giving them access to Cashbet’s extensive library of popular online casino games such as roulette, blackjack, slots and video poker.
Last year’s ICO reflected Cashbet’s aim to leverage blockchain technology for transparent operations, increased speed, and lower transaction fees. Notably, in January, 2018, the company struck a partnership to promote the token sale with English football giant Arsenal FC. While representatives of the London-based club stressed at the time that the deal was strictly to promote the ICO and not encourage fans to bet with the token, the fact that Cashbet was able to secure such a high-profile endorsement is, nevertheless, impressive.
Cashbet successfully completed the ICO in June, raising $38 million from the sale of its token, the Cashbet Coin (CBC), which operates on the Ethereum platform. The official announcement at the time stated that the company would use the proceeds from the sale to build the world’s first complete crypto-ready mobile iGaming platform. What this essentially means is that players can use CBC to wager on Cashbet-powered casinos. The company claims that wagers in CBC “are captured instantly in fully transparent microtransactions that don’t require incremental calls to the blockchain” and that players “have access to their transactions and casino outcomes, providing transparency”.
The Cashbet Coin is also listed on a three cryptocurrency exchanges – KuCoin, Bittrex and IDEX. The coin’s price peaked at $0.609 on June 12, but since then it has been moving on a steady downward trajectory. According to data from digital currency tracker Coinmarketcap, CBC closed yesterday’s session at $0.0069, which means that it has lost 99% of its value since peaking last June. While some of this can be blamed on the broader crypto slump that dominated the entirety of 2018, CBC’s extremely low volumes are also worrying. The token generated only $13,654 of trading volume yesterday, which suggests that there is little investor interest, at least at the moment.
Blockchain solutions for online casino businesses
While it still remains to be seen whether CBC will become a success, the idea behind it illustrates how blockchain can benefit the sector. Other companies are also thinking in the same direction. One such firm is TruePlay.
While not an online casino operator, per se, TruePlay’s aims to provide blockchain solutions for the online gaming industry. The company has developed a software-as-a-service platform that utilises blockchain and smart contracts to ensure that it is impossible to falsify game outcomes.
In an interview with Forbes in December, the company’s chief technology officer Stanislav Makarchuk talked in detail about the platform.
“It is a full-featured b2b platform for licensed online gaming projects and is not involved in the gambling operation per se, ebut can be integrated as a form of security for gambling sites. TruePlay is to authenticate games through blockchain and provide help in ensuring players that all their bets are fair and safe,” he told the Forbes.
FairPlay, an online casino developed by Gamingtec, has become the first online gaming project to utilise TruePlay’s technology. The casino accepts deposits in the two most popular cryptocurrencies, Bitcoin (BTC) and Ethereum (ETH), as well as in TruePlay’s proprietary token, TPlay. The online casino also offers instant payouts using the blockchain. FairPlay is also working on leveraging blockchain technology to guarantee that the casino cannot affect jackpots lotteries and tournaments. Through the use of smart contracts, the platform will be able to guarantee that prize funds remain unchangeable.
A perfect fit
Many blockchain advocates expect that blockchain technology will someday be able to change many aspects of our lives. Often these expectations are justified, but the technology’s potential to disrupt certain sectors can sometimes be exaggerated. However, in this case, I have no doubt that blockchain can transform the online casino industry for the better. The technology seems uniquely suited to address major issues in this sector, mainly the lack of transparency, players’ concerns over odds manipulation and the security of their funds. The blockchain is decentralised, immutable and trustless – to me this seems as the perfect recipe for a fairer and more transparent online gambling scene.