While people have been gambling online since the early 2000s, the technology at the time could not implement the necessary security measures that have allowed the industry to be as secure as it is today. Establishing this trust has not been easy for the online gambling industry.
In 2011, the FBI raided three top gambling sites: PokerStars, Ultimate Bet, and Full Tilt Poker for violating the Unlawful Internet Gambling Enforcement Act. To give you an idea of how big this raid was, some of these companies owned as much as $390 million – when they only had $60 million or less listed in their corporate bank accounts.
Gambling with a centralized government implies that people trust third-party operators enough to determine fair odds during games. In an ideal world, this may be possible. But repeated incidents – including but not limited to government seizures, dishonest payment processing methods, and misusing player funds imply that whenever gambling is involved, it’s unlikely to be a completely honest service with third-party operators.
Currently, cryptocurrency has provided online gamblers with a way to process transactions without having to go through an external payment processor. This makes gambling sites not only more trustworthy and transparent but also gives the government little reason to shut them down. By integrating cryptocurrency to its advantage, the online gambling industry is expected to reach $73.5 million by the end of 2024.
Advantages and Disadvantages of Crypto in Gambling
Gambling sites that have incorporated cryptocurrency into their games are known for two things: anonymity and decentralization. One of the biggest advantages of using Bitcoin to gamble is that a player’s personal information is kept secure. When a transaction using Bitcoin is made, a new address is created every time. This appeals to players from countries with stricter gambling laws, as it allows them to play without leaving a paper trail. The anonymity that cryptocurrency affords also protects their information from hackers.
Betting sites are powered by blockchain technology which are, by nature, decentralized. In the gambling world, this means that an account is usually not necessary to bet via crypto. All players need to do is place their wagers, send their virtual money to a cryptocurrency address, and when they win, they get direct access to their prize without verifications, conditions, and the like. They’re assured that their winnings go straight to them and not via another third-party provider.
Although, there’s one big drawback: cryptocurrency’s extremely volatile nature. It’s no big secret that the value of Bitcoin shifts at an extremely fast rate. If it moves in favor of the US dollar, then players are in luck. But if not, then their winnings won’t be as big as if they bet with fiat currency.
The Future of Online Gambling
Initially, the United States was the largest Bitcoin market on the planet. However, the cryptosphere has long spread its influence throughout other regions such as China, South Korea and more recently, Malta. Today, over 10% of the world’s online gambling sites are accepting cryptocurrencies such as Bitcoin, Ethereum, and Litecoin for a variety of games. Some blockchain platforms like TRON have even reported that a vast majority of their transactions have been made through gambling sites.
Though the number of online casinos using fiat currencies still outnumber the ones that rely on blockchain technology, the benefits that crypto gambling offers are bound to entice more operators in the future. The partnership between these two industries can only move forward. It’s just a matter of how fast.