Gambling in the Age of Cryptocurrencies and Blockchain
A slew of headlines have recently cast light upon the underhand and downright dishonest practices of online betting sites.
Nobody will have felt particularly sorry for the top brass at 888.com when the company was fined a record £7.8 million back in August following the revelations that it had allowed over 7,000 gamblers to continue accessing their accounts, despite the fact that they had voluntarily chosen to be banned from the site. This follows last year’s news that the Competition and Markets Authority (CMA) is planning an investigation into the unfairness inherent in the terms and conditions of online betting accounts, in the wake of customer complaints.
Whilst stiffer government regulation is arguably what these online firms fear most, there could be two even greater bogeymen lurking in the shadows.
The first of these is Bitcoin, the online-only cryptocurrency that is already taking the financial world by storm and becoming more ubiquitous with each passing day. Online casinos that accept wagers in bitcoins have existed for some time and their numbers are growing. A large part of their popularity stems from the fact that they frequently do not require ID or bank account details – players can come and go with ease and relative anonymity.
If all this sounds a trifle shady, then it is worth considering the flaws in a more mainstream approach. To register on any one of the many thousands of gambling sites out there involves surrendering personal data - which is vulnerable to hackers – and leaving oneself open to torrents of unsolicited third party advertising. And this is before the question of the honesty of the sites themselves is considered.
But if the spectre of gamblers deserting to digital currencies is an alarming one for these sites, then the technology that lies behind Bitcoin and its imitators should be scarier still.
All cryptocurrencies run on blockchain technology and it is here that the real innovation potential lies. Blockchain is revolutionising the internet and is set to have a massive impact on cyber security, data storage and supply chains, along with an almost limitless number of other fields. The key to blockchain and its potential is that it is completely open and decentralised – no single authority can have complete control over it.
Full Gaming Transparency
In terms of online gambling, this threatens to put power firmly in the hands of the consumer. Because blockchain makes information open for all to see, the odds on any betting outcome can become public knowledge and the casinos, bookmakers etc. will be unable to adjust these odds in their own favour. Gamblers will be able to see for themselves just how realistic (or not) their chances are of winning.
This transparency is precisely what the online gambling sites want to avoid. As the ends to which they are willing to go to milk customers and keep profits high are exposed, surely now is the time for gamblers to strike back with the newest weapons at their disposal.
The old adage that the house always wins is unlikely ever to change and if it did then the gambling industry as we know it would collapse. But in the often-lawless world of the internet, there need to be regulations to protect consumers. If governments are unwilling or unable to provide them, then we must look elsewhere.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.