As every year passes, cryptocurrency is moving closer and closer to the mainstream. We are seeing more sectors work with it, rather than against, and those that are already involved are seemingly strengthening their partnership.
This is certainly the case with the gaming sector. Many crypto bookmakers and casinos are now available, even if the legalities of using them in certain countries is up for debate. But the technology behind cryptocurrency, in particular blockchain technology, is now also being used.
Blockchain technology is open and transparent, those involved can see exactly where their cash goes. In betting terms this means you can see what kind of cut the site is taking from you, and what they are paying out.
The gambling industry continues to grow, with many searches online for the best free bet offers and with the rate at which cryptocurrency and technology is also growing, more collaboration seems inevitable.
Why Could Blockchain Technology Help Players?
This is all about regulation. The big betting sites are heavily regulated by places such as the UK Gambling Commission or other strong license providers, in other parts of the world. This regulation is all done behind closed doors, we know the site is above board, but only because the regulator tells us so, there is nothing to show it.
Blockchain technology would change all of that. In theory, those regulators would no longer need to exist, because players could see the transactions taking place, how much goes in and out, where your own funds go and more. You can clearly see with this that the site has not cheated, so you don’t need them to be regulated, because you can do it yourself.
Regulation of Blockchain, Crypto and Gambling
If you take a look at the regulation surrounding gambling, this shows the difference between this industry and the crypto industry, and also the area that is going to cause most concern if the two come together.
Source of funds is key for gambling, to prevent match fixing and money laundering. However, source of funds is not a thing for blockchain technology and the gambling industry. There is nothing in place, this is all done anonymously.
A deposit using a debit or credit card, or a bank transfer is easy to track, and all info needed will be with the bookmaker or the bank. A crypto wallet transaction is the opposite and can be done completely anonymously.
Until this issue is fixed, the chances of crypto betting becoming legal and regulated are incredibly slim. To get this over the line, something would need to change within the crypto industry, or add-ons would have to be in place for crypto users who want to bet.
The Need for Tighter Checks Within the Crypto Industry
This is a point that will really divide those who are currently within the crypto industry. Some will argue that having ID checks will lower the number of people using crypto, as some will leave while others will say the industry cannot move forward and attract more people unless these are in place.
Gambling, the relationship that it has with crypto currently and the need for regulation is the perfect example of how these could work in the future.
If crypto gambling sites want to grow into big players, they need to have regulation in place. The only way to do that is to fulfil the KYC requirements, and that means having proof of funds. This doesn’t have to be done by the bookmaker, which could lead to proof being shown when players choose which crypto wallet they want.
This may be some kind of middle ground compromise between the two, to get crypto betting made legal.
Should this not happen then there is a risk that crypto betting will forever be something done on the black market, without regulation and without any proper checks done to protect people. Yes, crypto has its own protections in place, but when it comes to gambling, it seems more is needed.
This is not something that will happen overnight though. As things stand, players have to choose for themselves if they want to bet with crypto and run the risk of playing on a site that is not above board. This is a big decision for someone to take, and one they shouldn’t have to.
However, that is all that this industry offers right now. Some players won’t like it, but to move forward, attract more players in and have regulated gambling, some concessions may have to be made.
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