Matthew Stafford, CEO of BlockChain Innovations Corp, says operators should embrace state-of-the-art blockchain technologies to deliver a truly superior player experience.
The global online gambling industry continues to grow at an incredible rate, with untold opportunities on the table for new operators and brands looking to enter the market and fight for their share of the prize.
The technology available to operators means that it is relatively straight forward to white-label a platform and leverage the range of third-party services available to get to market quickly and efficiently.
But while operators have choice, the majority are legacy platforms powered by tired and aging technologies. And while these platforms are proven and offer something of a safe option, they do not deliver the best player experience.
For that, operators will have to consider new state- of-the-art solutions such as cloud and blockchain. Some have already done this, being born on the blockchain and using the technology as the foundation from which to build a superior offering.
Of course, this requires a leap of faith that some operators will not be comfort- able with, or in a position to take, at this stage. This is why we expect to see most gambling companies slowly migrate to the technology in the coming months and years.
The most likely scenario in the immediate future is that the majority of operators won’t want to wholly abandon their conventional platforms and will need to find a solution that is fully compatible with existing platforms.
BCI, for example, has built its crypto-wallet and smart-contracts wagering technology so that it seamlessly integrates into an operator’s current systems. This gives the operator the ability to embrace our innovative platform technology for payments and betting, without having to make the perilous decision of an enterprise-wide migration.
Blockchain: the benefits for operators
Our platform, and other similar products, greatly improves the player experience and the day-to-day processes for operators. Because computers on the distributed network do most of the work, this technology is a low-cost alternative or complimentary platform for operators.
Blockchain technology has the ability to create a frictionless betting environment because funds are immediately available for wagering and players can bet directly from the wallet. It eliminates bad debts, such as chargebacks and counter- party risk through innovative cryptography that both ensures player identity and prevents double spending.
All the while, it allows for the accomplishing of multiple tasks simultaneously, such as posting lines and settling bets, in a single solution.
Additional benefits to using blockchain include: zero trust – no one has access to funds ever; there is no opportunity to steal funds; and every winning bet is guaranteed to get paid under blockchain rules.
What’s more, the blockchain is 100 percent transparent regarding which bets are being traded; at what price and in what quantity can be public information.
It also delivers superior compliance –this includes the assignment of specific player addresses that have met AML/KYC requirements with a full history of all activity associated with that specific address.
That said, some operators have raised concerns over how blockchain technology sits within regulations, particularly in new and emerging markets such as Asia and the USA. But they needn’t be concerned as regulators are coming to understand the scale and scope of the technology, and are taking it into account when developing their frameworks.
What operators should consider is that the current regulation/licensing frame- works being adopted by proactive regulators want industry participation in the process of blockchain adoption to ensure regulatory mandates and objectives are satisfied, but also to ensure that the broad capabilities of this new technology are realized within the industry.
Crypto frameworks coming into force
A challenge is the uncertainty around cryptocurrencies as a security and the regulatory consequences that go along with that determination.
A positive is that the regulation of cryptocurrencies in the US and other countries is underway, including the licensing of exchanges and a process for exempting certain currencies as utility coins under the Howeytest, which will create a viable framework in the coming months.
If operators can overcome these concerns, they can unlock the true benefit of being born on the blockchain.
Currently, conventional platforms run on technologies and system that are not sustainable long term and one can’t expect a better outcome by building a new platform for today’s modern operator on yesterday’s technology. Any innovation is necessarily limited to their ageing technologies and processes.
For any single wager on a conventional platform, multiple third-parties, technologies, and systems that haven’t improved from the dot.com era are relied upon by gaming operators and their player communities to: process incoming and outgoing payments; provide the wagering environment; confirm and settle transactions; post lines and results; and ensure integrity and combat fraud.
Fully deployed blockchain platforms eliminate all or many of these functions, thereby eliminating not only the actual cost but opportunity cost of identifying a partner, contracting and scoping with all parties involved in establishing a wagering environment.
In short, opting for a fully blockchain enabled casino/sportsbook allows operators to manage their core business as opposed to their partner-suppliers.
For these reasons, it is clear that launching on the blockchain will enable operators to offer a superior experience while driving cost savings and ensuring their long-term future as the global iGaming market continues to thrive.