Ever since the cryptocurrency boom of 2017, its potential impact of “revolutionising” the iGaming industry has been much anticipated. Indeed, tech blogs and online crypto magazines were filled with articles heralding 2019 as the year that crypto would transform iGaming, catapulting both into mainstream adoption.
However, as we head into the 11th month of the year, the truth is we’re still waiting for that mainstream revolution to take place. It could even be argued whether or not iGaming – which is the online arm of a global industry predicted to be worth an eye-watering $468 billion in 2019 (and that’s just the regulated activities) – actually needs to be boosted by cryptocurrency.
While the potential for this market to fully embrace decentralized currencies was, and still is, high, the question of whether 2019 has really been the year that crypto radically transformed real money online gaming remains to be answered.
Resistance from the Old Guard
In truth, on the surface, it seems as though crypto has had a minimal impact on existing iGaming platforms and markets – including online casinos, online poker platform, digital sportsbooks etc. In fact, check any list of the leading online casinos operating in the industry and very few will be cryptocurrency based, or even accept the likes of Bitcoin as valid deposit and withdrawal methods. For all the benefits that cryptocurrency offers a platform operating within real money gaming markets (transparency, ease of use, anonymity etc), the big players have been reluctant to integrate it.
The reasons for this vary, but largely centre on the impracticalities that, at this present moment in time, go hand in hand with trying to integrate crypto on a large scale basis. To do so would require working with third parties, and not all third parties are created equal. The larger platforms that operate on a global scale would need to work with a third party provider who can meet all the regulatory demands and requirements of different countries, whilst still giving customers the service that they have come to know and expect. Maintaining customer relationships, and constantly meeting their needs and expectations, is how brands stand out in an already over-saturated market. To risk all that, at this stage, would be impractical.
That’s not to say, however, that crypto wouldn’t benefit the iGaming industry, or that the industry won’t bring crypto to more mainstream adoption. It just won’t be those well-established brands who have spent years carving out a place in the multi-billion dollar marketplace who will do it.
On the customer side, those players who have already made the switch to using leading coins like Bitcoin and Ethereum have found an innovative workaround – E-wallets. Digital wallets that accept cryptocurrencies, like Neteller, are accepted payment methods with most online casino and poker platforms, so players can load their accounts with virtual currencies and play with bitcoin that way. It may not be an ideal solution, but for the moment it’s the only recommended one.
One area where cryptocurrency, or more specifically blockchain, has managed to make more of an impact, is in the creation of new online real money gaming solutions.
Numerous blockchain projects have been launched that are focused on evolving iGaming, rather than revolutionising it. As a result, the blockchain real money activity market has grown into billions of dollars. During the first quarter of 2019, DApps running on the TRON network handled over $1.6 billion worth of transactions, 64% of which were directly spent on iGaming activities. During that period, the daily transaction activity on the TRON network averaged around $102 million, with EOS and ETH following suit at $16 million and $4 million respectively.
It’s clear from these statistics and innovations that, although cryptocurrency undoubtedly has its uses and benefits as a method of payment, it’s the underlying technology that has the most potential to create the biggest disruption.
A Solid Bet?
There are, of course, numerous other sectors in the iGaming industry, besides online/mobile poker or casino games, which are also contributing to its multi-billion dollar value. The second largest sector within the industry after gaming is betting (estimated to be worth as much as $370 billion by the year 2022) and it was predicted that here too cryptocurrencies would make their mark.
Once again, the potential has been there for crypto and blockchain to have a significant impact on the sports betting side of things; the anonymity, security, fast transaction times and low to zero transaction fees that are associated with using digital currency as a payment method, would appeal just as much to consumers in this market as they would to real money gamers. But, despite a few moments that signified a slight shift, there have been no major disruptions in the sports betting market as a consequence of blockchain or cryptocurrency innovation.
Although some major sports teams and brands have started to embrace cryptocurrency – the Miami Dolphins in the US partnered with the Litecoin Foundation earlier this year to accept bitcoin and litecoin payments for tickets, in stadium purchases and merchandise, and Manchester City have just announced a blockchain gaming partnership with Superbloke – on the sports betting side of things it’s a similar story to gaming.
The companies and brands that have the power (and market share) to potentially take crypto to the mainstream just aren’t getting involved. The biggest sports betting companies, the ones that generate millions in revenue each quarter, at this moment in time don’t need to accept cryptocurrency as a valid payment method, or even integrate blockchain tech into their platforms. It’s a catch-22 type situation: crypto hasn’t gone mainstream and there really isn’t a huge global demand for it from customers right now, so it’s not particularly attractive to these companies, even though if they did integrate the technology it would likely lead to mainstream adoption across other industries.
Yes, a number of bitcoin and blockchain sports betting platforms have sprung up, which customers are using, but these new companies face challenges from both the dominant forces in the market and the differences in global regulations. In Australia, for example, it’s illegal to place wagers with cryptocurrencies on Australian sports betting websites, and there are some states in the US where sports betting is illegal full stop. So, any cryptocurrency platform that’s hoping to launch on an international scale needs to find ways around this.
Presently, there are offshore sites linked to crypto-friendly countries like Cyprus, Curacao, Montenegro and Estonia running promotions for international sporting events like the NBA, AFL, Premier League etc. but they simply don’t appeal to the average punter, especially when there are better deals and promotions offered by the established, fiat currency platforms.