Crypto in Online Gambling: A comprehensive review
Cryptocurrencies, led by Bitcoin and Ethereum, have long transcended their origins as financial assets to become drivers of change across industries. One of the more peculiar industries impacted by the rise of crypto is iGaming, more commonly known as online gambling.
The use of blockchain technology in the highly controversial yet extremely lucrative gambling business offers exciting prospects for players and providers alike, while still holding on to many uncertainties from dubious legality to a potential increase in gaming addiction.
In this article, we explore the emergent trends and likely developments of crypto in online gambling and analyze the various impacts it will have on the iGaming landscape. In this analysis, we are assisted by the expertise of the great team from the RevenueLab affiliate network. RevLab is a leading authority in iGaming affiliate marketing whose experience will help us dissect the most recent crypto-gambling development.
CRYPTO & GAMBLING: THE NATURAL PARTNERS
At its core, the convergence of cryptocurrencies like Bitcoin and the world of online gambling is a natural fit. These digital assets excel in transferring value quickly, securely, and anonymously, aligning with the key function of online casinos: the swift and hassle-free movement of funds between players and operators. Cryptocurrencies transcend borders and traditional banking obstacles, offering a global, efficient, and secure transaction solution.
Moreover, cryptocurrencies offer a host of features that make them ideally suited for the iGaming industry:
Decentralized Finance: Cryptocurrencies operate on blockchain networks, providing inherent security benefits. They are not controlled by a single entity such as a state or a bank, thus making it easier to avoid obstacles such as national regulations that haunt online gambling providers across the globe.
Anonymity: While not completely anonymous, cryptocurrency transactions offer a higher level of privacy compared to credit cards or traditional bank transfers. It is a critical benefit for the players, especially high-value players, who might wish to avoid as much as possible associations with gambling.
Irreversible Transactions: Unlike credit card payments, cryptocurrency transactions are irreversible, significantly reducing the risk of disputes and chargebacks. This factor may benefit the service providers more, however, it should be noted that fewer finance-related conflicts mean a more efficient business in general.
All of these qualities make cryptocurrency integration a natural progression for the online gambling industry, with the full extent of its applications yet to be realized.
We know that cryptocurrencies only recently have risen to prominence, and very recently entered the gambling market. No business person should be easily swayed by sensational proclamations, however. All decisions should be driven by data and cold-minded analysis. So what exactly the data is on the rise of crypto in iGaming?
- In 2021, 22% of Bitcoin investors used cryptocurrency for online gambling, a figure that is expected to rise as more players recognize the advantages of this payment method.
- An estimated $92 billion in cryptocurrency was spent on online gambling in 2021, underscoring the substantial value that digital currencies bring to the iGaming industry.
- A remarkable 80% of cryptocurrency gamblers express their intention to increase their gambling activities with crypto over the next year, indicating a burgeoning trend in player preferences.
- A significant 55% of online gamblers express a greater willingness to return to a casino that offers cryptocurrency support, highlighting the competitive advantage it offers in attracting and retaining players.
- When it comes to converging, 72% of holders anticipate increased adoption of cryptocurrency gambling in the next three years, pointing to the sector’s sustained growth and potential for further expansion.
EMERGING TRENDS AND FUTURE PROJECTIONS
As we can see, the adoption of cryptocurrencies in online gambling continues to gain momentum. Now comes the time to evaluate the benefits and unique features that crypto-gambling might bring with the ever-accelerating integration of the two industries.
We can divide all the prospects of cryptocurrencies in iGaming into two broad categories: those mostly affecting the players and those mostly affecting the operators. Let’s explore the players’ prospects first.
- Swift Transactions: Cryptocurrency withdrawals are processed within minutes or hours, a far cry from the time-consuming nature of traditional bank wire transfers.
- Higher Limits: Cryptocurrencies enable the transfer of larger sums compared to traditional payment methods, promising increased opportunities for high-stakes gaming.
- Value-to-Effort Ratio: Most cryptocurrency deposits and withdrawals incur minor network fees, which could become even more negligible in the future as blockchain technology advances.
- Anonymity: Cryptocurrency transactions provide a degree of pseudonymity, with potential improvements in privacy features in the future.
- Global Accessibility: Players can access their cryptocurrency funds from anywhere in the world, transcending the limitations of fiat accounts.
- Streamlined Payment System: Cryptocurrency allows for near real-time deposits and withdrawals, promising a smoother and more efficient gaming experience.
- Operational Smoothness: The ongoing trend of integrating cryptocurrencies involves lower processing overhead compared to traditional payment methods, with the potential for further optimization.
- Rising Player Engagement: Players are likely to engage more actively in cryptocurrency gambling, reflecting the increasing appeal of these digital assets.
- The use of cryptocurrencies reduces the risk associated with storing customer banking data, providing a more secure environment for both operators and players.
- Staying Competitive: As the adoption of cryptocurrencies continues to grow, operators must keep pace with customer expectations, ensuring that cryptocurrency support remains a competitive advantage.
THE IMPACT OF CRYPTO TRANSACTIONS IN GAMBLING
The technical aspects of integrating cryptocurrency into online gambling while ensuring regulatory compliance are evolving to meet the needs of both players and operators. The transaction process is mostly hassle-free and typically unfolds as follows:
- Player Sign-Ups and Deposits: Players acquire cryptocurrency from exchanges or cryptocurrency wallet services, then sign up and deposit their crypto onto the gambling sites. As the future holds even more user-friendly interfaces, making the registration and deposit process seamless and accessible.
- Identity Verifications: KYC processes will continue to evolve, ensuring security and regulatory compliance while becoming more efficient and user-friendly.
- Crypto Transfers: The use of cryptocurrency for fund transfers will become even more secure and instantaneous, leveraging advancements in blockchain technology.
- Withdrawals: The future will bring further advancements in withdrawal processes, making them faster, more secure, and more efficient, reducing the number of transaction errors and disputes.
In essence, the transaction process will continue to evolve, offering an increasingly user-friendly and secure experience for both players and operators that will appear much more advantageous each year when compared to old-school, bank wire transfers.
REVENUELAB’S TAKE ON CRYPTO IN IGAMING
RevenueLab, a leading iGaming affiliate network predicts a bright future for cryptocurrency in online gambling. Its Head of Business Development, Ilya Reznik, described in an interview his stalwart belief that crypto-operators are to take the lead in online gambling as a whole.
He notes how operators using cryptocurrencies tend to be more innovative in their approaches to games and technical solutions in general. They strive to stay cutting-edge across every feature, employing leading tech specialists to develop online gambling to an extent never before seen.
The expert also foresees younger, tech-savvy players gravitating toward crypto-based products, attracted by their dynamic, interactive nature, innovative games, and engaging content, ultimately transforming the iGaming landscape.
In summary, the partnership between cryptocurrency and online gambling promises a future filled with opportunities, offering efficiency, flexibility, speed, and security for players, operators, and regulators. As blockchain technology and cryptocurrencies continue to mature, the intersection of these two worlds will bring forth a future where digital currencies are woven into the fabric of online gambling, enhancing its versatility and reliability.