Blockchain in iGaming is a natural match. Blockchain is as disruptive as the internet itself. We should be proud to live in a time where such a technology has become available and shows promise of enabling us in ways that we simply have not been able to think about before.
Blockchain technology is sector agnostic, in the sense that it can impact every single sector of industry and speed up operational processes, margins, revenue, return on investment and overall profitability.
With over 10 years experience within the operational and commercial side of gambling (Poker affiliate, Lotto & scratch startup, Sportsbook and Casino brand, and Investment), seeing the benefit of Blockchain in iGaming is a no brainer!
How blockchain in iGaming can help the gambling sector
I’m not talking about accepting crypto here, but actual customer payments/transactions and remittance. Several amazing companies are working on payments using blockchain, which remove hefty interbank charges, allow for immediate settlements and lower exchanges rates.
Blockchain enables transactions in a way like nothing I’ve seen before. Think, no bank, just direct customer to operator level transactions.(Blockchain & Payments series coming soon)
Days of invasive customer tracking and bombarding them with messages will soon be over. In gambling we are pretty savvy when it comes to targeting our customers knowing their habits and being pro active with our customer base (we all know how much those leads cost to get there, so let’s keep them!)
Blockchain will change the way we go about CRM. Driving elements like security, data control (thanks GDPR!), privacy and rewards.
3. Gamification/Reward systems
Gamblers love their ‘free spins’, cash backs and rewards. In fact gamification UX of customer incentive and retention are key area where the online gambling sector can probably teach the blockchain community a thing or two. However it’s not on yet on blockchain and therefore our systems are not leveraging as much as we can. This is where Crypto could come in, creating your own branded token, assigning a value within your gambling ecosystem and driving rewards is extremely lucrative. Not only would it allow for cross brand opportunities but it also facilitates less liquidity requirements given that the utilities value is assigned within your own gaming platform. (Note: the scenario here refers to a utility token)
4. Game Development
Blockchain ledgers have RNG automatically built into them. It’s a key part of the actual technology itself. If RNG is there bring on the sexy graphics and let’s do this already.
And if you ever wondered about really validation of a win within a decentralised set up blockchain would allows for all game records to be transparent. We wouldn’t see who is playing per-say, but we would see the transactions happening.
*Interested in RNG game mechanics on blockchain check out EOS — Betdice
5. DATA tracking, lead Gen, marketing and integrity
If you own a ‘I(heart) spreadsheets’ t-shirt or mug.. or just love data, you will love records on blockchain. Data sets on blockchain vary depending on the if the ledger being used is centralised or decentralised. The cool thing here is that if you are participating on a decentralised ledger then you can see data (transaction)happening and being validated but not necessarily the message.
A common issue with affiliate/lead gen is data traceability and accessibility once the lead has gone past the registration page. Blockchain would allow for full end to end transparency. In the affiliate tracking space, I have seen two companies working on this already. Their solutions are pretty impressive.
6. Identification (KYC, AML, GDPR)
If you think no account casinos are the best thing since sliced bread, you’ve seen nothing yet.
Identity belongs on blockchain. We are in arms about facebook and how they treat our data but how are we different? The internet is slowly moving to a state where no company will ‘own’ customer data. Yet paradoxically regulators and EU directives impose KYC is done on each and every customer, and let’s not even get started on AML. Blockchain is the answer, with a very interesting thing called zero knowledge proofs. (What is ZKP? — Follow up article coming soon)
Disclaimer: Mid 2017 I worked on a use case for an identity ledger specifically for the igaming and forex sector in which I aimed to joined forces with regulators and smooth out this bottleneck. The use case was received with open arms by many however I didn’t pursue this venture; since then I have focused on meeting, discussing and assessing several competitive solutions. Many of these companies are looking to integrate with igaming companies.
7. Regulation, Responsible Gambling & Auditing
Regulation is regulation! In a Bitcoin maximalist world, all would be decentralised, regulators wouldn’t exist and we could all do what we want… but coming back down to earth now, let’s be frank, if you work in banking, igaming and forex you must obtain a licence.
Regulators impose gambling companies to bend over backwards, do a triple toe touching spin whilst holding fireworks and daggers, especially when it comes to responsible gambling and AML. I don’t think any serious gambling operator wants to have responsible gambling or AML issues, in fact most of us have strong relationships with regulators to ensure we are working together to combat these two key issues within our sector.
You will empathise with me completely here if you are having to hire extra compliance headcount, have teams spending hours quarter on quarter preparing audits, spend a fortune on third parties auditors or if you are currently paying the UKGC millions for activity they deemed inappropriate just to keep your licence that already cost you 3 years profitability.
Blockchain certainly enables brand to regulator transparency and simplified auditing by means of triple-entry accounting, this reduces hours of auditing, compliance, risk and fines.
8. Funding & Investing
If you are a live and active iGaming company looking for funding, the world is at your fingertips. If you already have a user base, and are looking for funding and further customer engagement, an ICO might be the answer. The word ICO has probably set off your building’s fire alarm right now, right? Don’t stress. ICO’s are not evil, deceptive ways of fraud (despite the horror stories of 2017).
ICOs are an excellent way of funding, using your customer base. In fact who better to put money into your company than your loyal customers. In the eyes of the consumer, if you have a live product, active customers, are already regulator (igaming licence) then they will trust you, and you will be successful. Whats more, if your ICO offers a security token this will allow you to list upon exchanges and enable trading of your token. This IPO but directly peer to peer.
Note: The ICO process is regulated in Malta by the MDIA, they work with the MGA (since your core business in Gambling the MGA remain your core regulator). To issue and ICO you will need to engage with a VFA agent to present your case to the authority. A good VFA agent will help you understand the difference between a utility token and security token and what would work best for your business.
What We Think
Blockchain in iGaming is here and here to stay. Investing in blockchain companies who are experts in the technology and can provide a lucrative solution to your business, be it on the payments, CRM, data, or identity side of things is certainly a wise investment. Be sure to do your due diligence. Normally the teams check out but most blockchain companies are struggling to ‘go live’ (mostly funding issues). Take a good look at roadmaps, headcount, burn rates and ensure that there is true commitment to deliver.
The last 12 months have given rise to several protocols (platforms) launching their mainnets. Protocols allow you to build within their frameworks) Most of these protocols are hungry for use cases, some even offer to pay YOU (your dev team) to work with them.
The ball is in our court, the take away here is that there are really no excuses for blockchain not to be at the top of your list during your innovation and strategy days.