In many ways, the use of cryptocurrencies in online gambling remains in its infancy. The major online gaming licensing and regulatory authorities are yet to implement coherent accreditation protocols for crypto gambling operators (although the industry-leading Malta Gaming Authority is making moves in this direction), while the major online game providers such as Microgaming and NetEnt do not yet produce online slots and casino games that support crypto wagering.
However, it is impossible to envisage an online gaming industry in which cryptos do not come to play a major, if not dominant role. This is in part borne out by the hugely successful Initial Coin Offering (ICO) of iGaming platform developer CashBet, as well as the significant number of other gaming ICOs that are in the pipeline. And while the majority of gambling companies (such as the ones featured on playright.co.uk) continue to seek finance through venture capital and private equity, an increasing number of innovative e-gaming start-ups are turning to ICOs as the way forward.
There is no doubt that an ICO can be a risky prospect for an investor, especially someone not necessarily well-versed in cryptocurrencies, and in the minds of some this inherent insecurity, mixed with the vicarious nature of online gaming itself, makes for a potent mix. However, the CashBet ICO has shown that there is nevertheless a substantial appetite for investing in the booming crypto e-gaming industry.
Part of the reason for the enthusiasm in e-gaming ICOs is the growing regulation of online casinos and the industry as a whole. Despite initial fears to the contrary, regulated markets have been shown to be good for operators and players alike, if growing online gaming revenues in the UK are anything to go by, and with the increased levels of surety and trust on all sides that a licensing authority brings, the same is likely to happen when crypto gambling sites likewise come under a regulatory regime.
It could be argued that the CashBet ICO, for instance, achieved its hard cap of 142,975,000 tokens so readily because of the company’s approvals and licensing for its existing fiat currency platforms by the Alderney Gambling Control Commission and UK Gambling Commission — and the expectation that it will be at the front of the queue when crypto gambling sites are similarly accredited.
Both players and operators alike have shown an appetite for transparency and credibility throughout the industry, and so the added security and respectability that licensing confers on operators will likely have a further positive impact on the desirability of e-gaming tokens, particularly given the fact that currently ICOs themselves are to a large degree unregulated.
In addition, platforms and providers are developing more and better ways of countering the major issues that have to date held crypto gambling back — namely, the speed of blockchain transactions in the e-gaming space, the levels of trust (or lack of it) in the technology shown by players, the quality of the games on the market, and the general availability and accessibility of cryptocurrency casinos.
For investors looking to purchase tokens in an e-gaming ICO, the fact that workable solutions to these issues now look viable has been a further incentive to get on board. The major barriers both to industry growth and player acceptance would appear to have been removed, and this suggests an exciting new phase in the development of blockchain gambling sites, with an even greater focus on mobile gaming, is set to begin.
Another appeal for investors is the greater world-wide accessibility to e-gaming that cryptos provide, especially for players in underbanked regions of the world, such as Africa where traditional banking facilities are not always readily available, or regions where access to online gaming is more restricted. Crypto gambling enables players in these markets to be reached more readily and easily than fiat currency sites, and so investors would seem to be viewing this as an opportunity to get access to markets that look set to grow on the back of the expansion of crypto-powered e-gaming.
Overall, therefore, there are compelling reasons as to why we can expect to see more ICOs from online gaming companies as more of the industry adapts to and moves into this space. The technology itself has always had appeal to players in terms of fairness and transparency, but this is now increasingly accompanied by lower costs, better gaming options and dramatically improved mobile technology. As such, cryptocurrency casinos are set to move very quickly from being a niche interest to being the dominant platform for online gambling.
As a consequence, the interest of investors in the ICOs of e-gaming operators can likewise be expected to increase, as the full potential and reach of crypto gaming becomes more widely recognised and the inherent risks more readily understood. While some gaming companies will continue to raise capital using more established methods, as the whole industry shifts more and more into the blockchain space, so will the accompanying finance models.
More than just a trend, e-gaming ICOs look set to stay.