Why Blockchain is a Must-have for Online Gambling Industry
Online gambling is one of the most promising industries with a projected compound annual growth rate of more than 9% by 2021. It is expected to surpass $59 billion USD in 2018. A study conducted by SuperData Research found that mobile gambling/gaming grew 75% year-over-year and currently, it accounts for over 25% of all gambling.
When it comes to gambling, there are multiple issues that a gambler face. They are subject to regulatory restrictions and face obstacles, such as potential fraud and dishonest practices, that places mistrust within the industry. This is made worse when gamblers rely on third-parties which often results to unfair games and rigged monetary transactions.
By utilizing Blockchain technology, gamblers can expect that many of these concerns and issues are resolved, providing a safe haven for fair gaming.
1. Transparency and Trust
Myth / Fact: The house always wins.
Historically, online casinos have been accused of using unfair practices to give themselves the advantage. The 2018 Iovation Gambling Market Research stated that ‘Cheating/ Fraud’ has increased by almost ten times within four years.
A recent gambling survey showed that the primary reasons that gamblers avoid online gambling are due to security issues and a lack of trust in the systems. The source also stated that among the typical complaints from gamblers, ‘Unfair RNG/Rigged games’ is ranked sixth. Due to the nature of fraudulent activities and inappropriate practices in the gambling market, clients and investors alike are not keen on investing. This disrupts the ecology of the industry and slows down the market’s user growth tremendously.
The introduction of Blockchain technology can boost trust among gamblers and enable them to play confidently. Gamblers can place their trust in Blockchain technologies because games build on smart contracts enables both gamblers and business to verify winnings through a shared ledger established within the blockchain. An increased transparency will remove bad practices in the industry and bring about fairness in the games to all parties associated in the online gambling industry.
Blockchain technology creates value by allowing democratization. It provides a decentralized structure that ensures security, immutability and enables anyone to be a member of the blockchain casino. As such, blockchain casinos enable users to fund casinos in return for a percentage of the profits realized.
For example, GINAR is a pioneer in providing innovative decentralized Random Number Generation (dRNG) service based on Blockchain technology. It promises to generate true, fair and transparent random numbers. Fairness is guaranteed as participants of the blockchain are randomly selected by GINAR to contribute to the creation of the random number. By enabling random selection, participants can verify through the blockchain, to check on the integrity of the random number generated.
3. Reduce House Edge Costs
House edge is defined as the average percentage share that online casinos take from its players to ensure the survival of the business. Since the amount varies accordingly to the profits shared with shareholders, the house edge places a liability on gamblers.
A blockchain gambling site, however, is able to remove the fees and charges related to such gambling transaction. This is primarily due to the lower overhead costs compared to regulated service providers. This includes lower audit cost, licensing fees, transaction costs, payment to merchants, regulatory compliance costs and tax (if any)
The blockchain landscape creates a win-win situation for players, gambling operators and regulating authorities alike through an environment that benefits from fairness, trust and transparency.