The online gambling industry is growing at an exponential rate. According to the Business Research Company, the worldwide gambling market reached a value of over $449 billion in 2018. Growth in the market has resulted from the advancement in the economy, rapid urbanization, favorable visa policies, the rise in mobile gaming, and, of course, the entry of cryptocurrencies into the gambling industry.
The market is expected to reach a value of around $565 billion by 2022. In the coming years, the legalization of gambling, increasing use of social networks, global economic growth, and changing habits of customers will fuel the expected growth.
The global gambling industry is divided into three different segments: lotteries, casinos, and sports bettings. Each of these categories is further divided into either online or offline, which is segmented depending on the sales channel. The market for sports betting is the fastest-growing category with an annual growth of 6.9% while the lotteries hold the biggest gambling market with a revenue share of around $207 billion.
In the future, the online gambling market will be the leading segment with a market value forecast of $102 billion. In fact, this growth is predicted to happen before 2025. The drivers of growth will include a surge in the use of smartphones and improved access to online gambling platforms.
The gambling industry has its own set of challenges, which could hinder the forecasted growth. Blockchain technology can play an important part in addressing these concerns, which include the lack of transparency and trust, inaccessibility, infective payment systems, frauds, etc.
The technology has already been successful in the cryptocurrency industry owing to its vital features such as transparency, immutability, safety, data security, and more. Likewise, these features can be applied to transform the gambling market. We have prepared a list of effects that blockchain technology will have on the gambling industry:
Everyone has heard of a popular statement “the house always wins”, meaning the players are always on the losing end. Players are inclined to believe that online gambling platforms have a way to turn the odds against them. This has resulted in many people keeping themselves away from the industry.
Blockchain technology can alter this perception of players by using blockchain smart contracts to aid the verification of records. These records will be distributed to both the players and the gambling company via a shared ledger. It will ensure that gambling platforms don’t change or manipulate the data, which will increase their transparency and create trust among players.
Online fraud is a major concern that accounts for significant losses in the gambling industry. Two popular ways of executing fraud are:
Players acting smart when withdrawing or depositing money.
Hacking the gambling site and stealing the personal data of players or manipulating the game data in favor.
Blockchain technology can solve these problems by implementing high-level encryption to secure transactions and data on gambling platforms. Besides, the blockchain’s distributed ledger makes it impossible to manipulate or hack because every player will have a copy of the platform’s data.
Huge commissions, unexpected fees, and blocked transactions are a few problems of the current payment systems, which are hindering the growth of the gambling market. As a result, players are left to wait for days to get their payments processed.
Gambling platforms or cryptocurrency casinos using blockchain technology have the option to use popular cryptocurrencies or their own native token to facilitate payments. Thus, allowing fast processing of players’ payments compared to the traditional banking systems.
Nowadays, players have to trust that their online casinos are generating fair results without changing them according to the bet, or some other arbitrary factors.
With blockchain technology, users can prove the fairness of a game using randomly generated seeds and hashes. While the words “provably fair” do not necessarily denote a trustless system, this innovation certainly takes the trust beyond the gambling websites’ claim of “third-party-verified gaming”.
Many countries around the globe are yet to legalize gambling. Denying access to online casinos leads players to use illegal bookmakers and they end up losing money because it is not enforceable by law to have these bookmakers honor players’ payments.
Blockchain technology addresses this problem by allowing businesses to develop decentralized gambling platforms with the feature of using digital currencies. Players can use these platforms from anywhere in the world, irrespective of their country’s stance against gambling.
The online gambling market is poised to grow in the future despite favorable predictions. Integrating blockchain technology into gambling platforms will provide much-needed transparency across the industry. The technology has already proved to be a highly disruptive solution to problems inherent to many systems in our economy. In the gambling industry, these problems are being heavily felt and blockchain has come just in time to save the day.