There are rumblings afoot in the online casino game. Gambling is one of the oldest forms of human entertainment, but it has been an industry where things don’t always move quickly. While online casino play is now becoming more and more common, it wasn’t always this way. Technologies have taken time to build, and licenses for online casinos can be hard to come across or difficult to get.
However the industry now is coming of age, with many different online casinos available for people to access all over the world. Businesses are now more sure of their legal obligations, as laws have progressed, and there is the tech knowledge available to build whatever sort of systems you please.
This means there is now more competition in the online casino world. And what does a more competitive market mean for businesses? They need to be able to give themselves some sort of edge over their competitors. And what better way to do it than with a new technology that’s showing promise in fields you’d never even imagine…
A blockchain primer
Blockchain technology has been splashed about in the news a far bit recently. What with the meteoric rise of cryptocurrencies, people are beginning to want to learn more about just how crypto works. The blockchain system of recording transactions was a part of the original Bitcoin scientific paper, later implemented in real life.
The premise of a blockchain is to have a complete list of all records ever made. Each record (known as a block) that is added to the chain of records contains a cryptographic hash of the block before it. The list itself cannot be edited due to the design of the system, which is essential for anything to do with financial transactions. This list of records exists on many different computers around the globe, each working together to validate the blocks.
While its origins were conceived along with the Bitcoin currency, it became clear that you could use a blockchain for other purposes, too.
A blockchain is not only a way to easily make an uneditable copy of a set of growing records. It can also be used to create a contract between two parties with certain terms.
How does this fit in with online casinos?
We’re already seeing the effects of the rise of crypto itself in the world of online gambling. There are many companies and many games picking up Bitcoin and other altcoins as a form of payment for their systems. However, there is something more exciting that is just rearing its head that we believe we’ll see a whole lot more of in the future – and that’s blockchain casinos.
There are two things that blockchain casinos have that traditional online casinos do not. This is the provably fair system and smart contracts built into the game. Provably fair means the online game has the proof of the system available for anyone to check. Because the game is no longer a “black box” the results are indisputably fair, unless there is a bug in the code. A smart contract ensures your money can’t just go walkabout – it’s in the contract to either pay or not pay out, depending on the outcome of the game.
Let’s take a look at some of the first offerings in the world of blockchain based casino play.
SmartBox by SmartPlay.tech
Taking the blockchain into real world casinos seems like an odd idea at first, but it might actually be a stroke of genius for SmartPlay.tech. Their product is a European Roulette game, with the provably fair smart contract for the game itself (that is run on the Ethereum blockchain) easily viewable for anyone to read.
The game features an actual machine with a display and a version of the game is currently being tested in a land based casino – the online version is already up and running, which you’re free to play. Although the project isn’t quite there yet, blockchain casino machines might be the norm on the casino floors in years to come.
Edgeless, back in December 2017 became the first legal blockchain casino. Licenced in Curacoa, the company has launched a blackjack game, with dice, poker, and sports betting all apparently in the works. The platform is based on the Ethereum blockchain using smart contracts.
The most interesting part of the Edgeless casino is the fact that it is exactly that – edgeless. Whereas traditional online casinos see a 1-5% house edge (and Bitcoin casinos have a 1-0.1% house edge), Edgeless has 0% house edge.
Ok, that all sounds grand but you’re probably wondering how they’ll make money – this isn’t just a pet project, it’s an actual business. This is because it’s a game of luck and skill (unlike, for example, roulette, which is pure luck). This means that players who are less skilled than great or perfect players will make mistakes that cost them games overall – and so the house will win. For perfect play, a player will break even over many millions of games. However, for imperfect play (and that’s most of us who are just playing for fun and haven’t studied strategy) the house will have an edge over time. Edgeless also plans to win fans with their edgeless casino games who they believe will stay on for sports betting (which will have a 4% ROI for overall wagers).
Funfair is another company taking up blockchain as a technology to be capitalized on when it comes to online gambling. The company is building a complete suite of slots and table games that they will then onsell to casino licensees – what’s known as white label online casinos, where people have a turn key solution.
By offering these solutions, it allows anyone to start their own online casino. Be rebranding the pre-built casino, it is unique, and because it’s run on the Ethereum blockchain, it’s cheaper to run and fairer to play. How successful the business is depends entirely on an owner’s marketing efforts.
Funfair has raised over $26million to date, and have plans to launch their initial product publicly around the end of March, 2018.
There are plenty of other blockchain based casino projects in the works. These 3 examples are just the tip of the iceberg, with others such as AstorGame and Sp8de (who will run their system on the Cardano blockchain) on track for imminent release. These companies are raising the funds to build their online casino projects through ICOs – initial coin offerings. By having their own “coin” as game currency, and selling these coins to investors before building the product, essentially anyone can invest. By buying coins during an ICO, investors are essentially gambling on the whether they think the project will do well (which drives up the cost of the coin).
Blockchain technology is helping online casinos to be safe, secure, and provable – something which all punters are concerned about when gambling online. Because the costs for running the systems are fairly negligible it means that casino providers can do things like run an edgeless system. Using the blockchain for both all online casino games as well as (potentially) all real life casino floor games is a fairly likely future scenario, given the benefits that this technology offers. If you’re a gambling person, then maybe check out some blockchain casino ICOs to get involved on the other side of things too!
Casino Image via Pixabay