Ready or not, blockchain technology is coming to casino gaming, and it’s bringing with it new dimensions of transparency, auditability, and improved efficiency in payment processing and exchange of value.
And these aspects could transform how a number of core gaming industry functions, from sports betting to data security to Bank Secrecy Act compliance, are conducted, said a panel of experts Tuesday at the Integrated Resort of the Future booth on the G2E show floor.
Blockchain, also known as a distributed ledger, is the technology underlying bitcoin – the peer-to-peer cryptocurrency that has seen its value increase by more than 400 percent this year alone.
Blockchains allow multiple parties to input information into a shared ledger, and for communities of users – either public or private – to control how individual records are updated or amended. As control of the information rests with all of the nodes in the community, it eliminates the need for a centralized storage solution and potential point of failure.
While Bitcoin and virtual currencies, since their invention, have found a niche as a payment channel for offshore internet casinos, these entities are quickly becoming more mainstream in the gaming context – particularly in the area of e-sports, where startups like Unikrn are undertaking token offerings to raise funds and issue currencies for use within their ecosystems.
One key benefit of blockchains that is of particular interest to the gaming industry is the ability to build smart contracts, which are self-executing pieces of code that automatically trigger when built-in conditions are met.
Kevin Cochran and Peter Dugan of Capco, a business and financial technology consultancy, argued that sports betting, daily fantasy sports and other forms of peer-to-peer wagering could reap tremendous efficiency gains from a blockchain-based smart contract platform.
Cochran offered the example of a bet between two individuals on a football game, whereby both parties place their wager information into the blockchain, which then produces a smart contract. Once the game is finished and the conditions of the bet are fulfilled, the smart contract automatically executes and pays out the agreed amount to the winning party.
Not only would this blockchain-executed transfer of value come at much greater speed and lower cost than legacy payment channels, the immutable aspect of information stored on a blockchain affords the transactions a degree of auditability and transparency that is unique.
This immutable nature could help foster fairness in betting by providing an additional level of protection against scams and tampering. Any allegations of match-fixing could be checked against betting data stored on the blockchain.
Blockchain applications could also help casinos build digital identities for customers for assisting with anti-money laundering and know-your-customer compliance obligations.
