Betting on the Blockchain - How Casino's use Crypto to Enhance their Offerings

The global gambling market is a $450 billion industry, with nearly $80 billion of that revenue located in the U.S. Online casinos are a major component of the sector’s rise, more doubling in revenue from 2011 through 2020. Not only are we gambling more, but how we do it is evolving.

Not only have half of all adults placed a bet on a sportsbook, but prediction markets are becoming more commonplace. Esports is contributing to this industry with its nearly 500 million annual viewers compared to 164 million people who actually play video games. In-game loot boxes are now being considered a form of gambling.

With so many complications, it’s no wonder more casinos are looking to blockchain and Bitcoin for solutions.

Understanding Smart Contract Prediction Markets

Blockchains are inherently trust networks by design. Augur (REP) is an Ethereum-based prediction market that leverages this technology. Ethereum’s smart contracts are ideal for storing and executing on placed bets, and can easily be used to replace sportsbooks.

Both ETH and DAI are used to place no-limit bets on all manner of events, from sports to politics, weather, economics, pop culture, and more. Anyone can create a spread for anything, and the platform’s oracles report truthful outcomes.

Misreporting on the Augur prediction market costs REP tokens and demotion within the network. While Augur itself doesn’t get much use, it does highlight the capabilities of this technology. Transparency is important in sportsbooks, as is data accuracy. Other projects are following suit, like Veil (an Augur fork) and Stox.

Of course, this only represents one part of gambling. Some projects are pushing entire casinos to the blockchain.

Migrating Online Casinos to the Blockchain

Fun Fair is a white-label online casino filled with everything from slots to table games. This out-the-box platform can be used by any casino looking to migrate its operations to the blockchain. FunFair uses Argonaut Software as an engine, which was developed by co-founder Jez San Obe.

Like Augur, FunFair is based on the Ethereum blockchain. It’s also not alone in its efforts. Projects like the DAO.Casino, and Bitbook are all aiming to standardize blockchain-based online casino operations.

These teams are all working toward integrating traditional cloud-based casino technology with blockchain. It’s a hefty feat, considering the regulatory compliance, reporting, tracking, security, and other issues needed to make things work. Every time you pull that slot machine handle, a series of random number generators, checks, and balances occur automatically in the background.

Critics wonder if current blockchain technology is scalable to the transaction needed for an international casino operations. This is why many in the industry eschew blockchain in favor of cryptocurrency payments.

Accepting Bitcoin (and Other Cryptocurrencies) for Bets

Some casino operators are savvy to crypto, but they’re weary of placing their backend operations on an unproven blockchain. Both Bitcoin and Ethereum infamously bottlenecked in the early stages of development. However a solution like GBL Pay has been processing Bitcoin for online casino's and sportsbooks since 2015 without a hitch.

However with Bitcoin is increasingly popular as a currency, with over 42 million users, and 85% of the supply is already out in the wild. Also consider there are nearly 3,000 cryptocurrencies currently trading on the market. It only makes sense for casinos to accept at least a handful as currency.

Online casinos like BTB88 and Pokershares offer Bitcoin as a deposit option. They’re competing with legacy casinos like Red Dog Casino, Slots.LV, and Lincoln Casino that just offer traditional payment options like Visa, Mastercard, American Express, and debit cards.

Regardless of how they implement it, online casinos continue exploring cryptocurrency and blockchain to carry their operations into the future.

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