CashBet President Ed Brennan explains why the use of cryptocurrency in land-based casinos is not only inevitable but should be welcomed with open arms.
There was a significant amount of media focus in 2018 on the positive disruption cryptocurrencies (crypto) and blockchain are having in the iGaming sector – and with good reason. Estimates from research bodies already categorise 60% of Bitcoin-based transactions as iGaming related and this is likely only the start. Putting 2018 aside, if we are to shift our focus onto what effect crypto and blockchain based technology is going to have on gambling in 2019, my prediction is that the next wave of positive disruption will be the shift of crypto and blockchain adoption from beyond just online and towards land-based casinos.
So what place does crypto have in a physical casino? It is interesting to think of a time when a player can walk into a casino in Macau armed with only a crypto e-wallet on his or her smartphone – no dollar bills, no credit cards – but I can assure you, it’s going to happen soon enough.
Crypto is fundamentally different to the traditional paper currency (fiat) currently used in land-based gambling and leveraging any blockchain technology to facilitate payments and wagering will do far more than a traditional gambling chip ever could.
In many ways, crypto is perfect for the casino environment. It is limitlessly divisible, transparent and liquid. One can easily use a “wallet” to send and receive as much (or as little) as they like and expect it to be validated safely and then spent outside of the casino without the need to physically convert currency back from casino chips.
Why am I so confident of this coming change? Blockchain, which is the technology that underpins all cryptocurrency transactions, is quite simply ground-breaking. Simply put, blockchain is the system that allows the safe recording and transfer of data without the need for middlemen. It’s tamperproof, transparent and irreversible.
When it comes to safety and transparency of records, blockchain has it all: fraud, identity disclosure and payment data vulnerability are all solved by the distributed ledger technologies (DLTs) that power blockchain. In their essence, DLTs hold the key to transforming the land-based gambling industry by facilitating products that are faster, more transparent and more secure.
Currently, casino operators deal with an operational process that requires the physical creation and distribution of gambling chips that are used on gambling tables and are then converted back into cash when a player’s winnings are redeemed. This process is slow, expensive and insecure. Operators face several risks at every point within the process.
Based on DLTs, crypto transactions will become far more frictionless and profitable to handle than traditional fiat – making it a far more attractive prospect for gaming operators and players alike.
As we currently stand, many land-based casinos are suffering with falling revenues because of increasing competition and saturated markets. It is undeniable, however, that land-based casinos can always provide a better gambling experience than their digital counterparts.
As anyone who has watched James Bond can attest, there are few experiences that can match the adrenaline thrill of playing at a real gaming table in a physical casino, and if major operators are able to harness their competitive edge and combine it with a modern model of payment and technological infrastructure, then we’re going to see the playing field get far more even.
A digital gambling currency, verifiable and redeemable outside of a gambling hall is, as several land-based casinos with increased revenue and attendance are already finding to their advantage, the ideal way forward.
In principal, crypto, blockchain and e-wallets remove the bulkiness that is experienced when using cash and credit cards. The use of digital currency underpinned with a blockchain that provides fully trustworthy transactions moves the chance of a casino operator being defrauded by a bogus cheque or counterfeit money to close to zero.
Additionally, nefarious actors will not be able to claim fraudulent chargebacks or refunds using verifiable crypto as it creates a perfect digital paper trail on a public ledger.
The ramifications this new technology is going to have on player and casino trust will be revolutionary and have the potential to change the following adage forever: “The house always wins”. With an environment that offers each and every process in a fixed and verifiable action between player and operator backed by data points, a decentralised gambling-based platform has the ability to lower operating costs required to handle transactions, reduce the risk of fraud to close to zero and the chance to offer players far better odds than ever before, while simultaneously boosting an operator’s balance sheet.
