Throughout the last 12 months, cryptocurrency has been making headlines – whether that be because of bitcoin booms, the creation of new currencies such as dogecoin or even bitcoin becoming legal tender in El Salvador.
So it comes as no surprise that many within the gaming industry are shifting their attention toward the adoption of cryptocurrencies. For Dmitry Starostenkov, CEO of EvenBet Gaming, we are likely to see more and more companies beginning to use decentralised applications – thereby making online casino entertainment both safer and smarter.
CasinoBeats: First of all, why has there been an increased interest in the adoption of cryptocurrencies for gaming companies?
DS: If we look at this from the long-term perspective, the situation is evolving. Most of the major online casinos and sports betting operators allow their users to pay with cryptocurrencies, and payment processing providers working with the igaming industry are also ready to work with such payment methods. At the moment, using Bitcoin to make a deposit and to bet on your favourite football team is as easy as using a bank card. Even PayPal has adopted crypto, and this means something!
There are several reasons for that. The main one is the increased adoption of cryptocurrencies by users, particularly active and educated players, ready to spend money on online entertainment. If they want to pay with Bitcoin, Etherium, or Dogecoin, why should the operator refuse these payments?
Second, some operators are also exploring the potential of crypto technology outside of payment processing: using decentralised applications for running games or smart contracts and tokens for operations with players’ funds. Such projects catch the attention of blockchain enthusiasts, not only players and bettors; people involved in the crypto markets are natural when it comes to risk: holding a cryptocurrency now is a sort of gambling too.
And third, in many gaming jurisdictions outside Europe playing on cryptocurrencies is easier for compliance with AML and KYC policies.
CasinoBeats: How can we encourage more operators to adopt the use of cryptocurrencies?
DS: It’s simply not possible until more players want to use crypto. No operator will invest in the technology unless the target audience demands it. Research conducted in the UK this year shows that although 17 per cent of gamblers are likely to use crypto, 54 per cent believe that digital currencies are not to be trusted. An enormous gap to fill!
CasinoBeats: Are there further potential uses for blockchain technology outside of the typical deposit and withdrawal processes?
DS: Sure, there are. The most obvious one is using decentralised blockchain tools for handling financial operations, with no need to deposit money to the operator or to convert cryptocurrency into a fiat one, as it’s mostly done now.
For example, in poker, that would mean that the operator doesn’t handle the player’s balance, money is transferred between all the parties participating in the game. It is a completely different approach to operating, but I’m quite sure that with the wider acceptance of blockchain tech by the players it will become increasingly popular.
CasinoBeats: What would you say are the wider benefits for the industry if more operators adopt crypto payment methods?
DS: If that’s simply payments, there’s only one advantage for the operators: they will make life easier for players who want to use this as a payment method. However, this is not to be missed in a modern competitive environment where providing a flawless and engaging user experience is a key to success.
CasinoBeats: And what are the wider implications for security, transparency, and the overall player experience?
DS: If we speak about player security, cryptocurrency payments provide fewer possibilities for fraud, including phishing or stealing bank card data. It is even safer when decentralised applications are used for all the financial transactions within a game. Yet, whenever the human factor is involved, fraud cannot be fully eliminated, and a player still might become its object, but the risks are less significant for blockchain technologies.
In terms of transparency, there are two sides to the coin. On one hand, cryptocurrency users are anonymous, payment data are not linked with a bank account or a physical identity. That causes numerous doubts and questions from authorities to crypto-based gambling projects. So they, more than anything, may become a subject of AML investigation.
At the same time, modern educated players value additional privacy in financial matters, so the operator has to find an exact balance between users’ convenience and following AML directives. The best solution, as for now, is to enforce strict KYC procedures before allowing users to deposit or cash out, without relying on third-party data in financial transactions.
So, you see, cryptocurrency operators working legally, have to maintain a complicated equilibrium between improving UX and compliance. One day, probably, we will be at the point where all users will have a digital identity that wouldn’t require additional KYC measures, but we’re not there yet.
CasinoBeats: Moving forward, what do you envisage will be the future for the crypto-poker space? Will we see more and more casinos develop their own wallets for crypto and see more operators incorporate various payment methods?
DS: To create its digital coin and to make this idea at least slightly profitable, an online casino should have immense liquidity, to provide enough transactions with this currency. Yet, cryptocurrencies as a payment method have already secured their place in the industry.
I suppose that in the next two or three years, we will see more and more projects using decentralised applications for various purposes, making online casino entertainment both safer and smarter.