Cryptocurrencies are used in iGaming just like in any other industry and offer many advantages for both operators and players. If you are a bettor, digital currencies can provide a more discreet, secure, and satisfying experience. If you are an operator, you can significantly reduce your operating costs, increase your odds, and make it easier to acquire new customers. However, it is important to keep in mind that there will be some disadvantages due to the nature of this technology. Here is everything you need to know before you start crypto gambling.
Advantages of Crypto Gambling for Bettors
As a bettor, if you use digital currencies such as Bitcoin, Ethereum, and Litecoin instead of currencies such as USD, EUR, and PLN, you will get many advantages and the most important ones are the following:
- Lower fees. Almost all cryptocurrencies except Bitcoin have extremely low transfer fees, especially if you deposit or withdraw outside of rush hour. Every crypto has a fee and the blockchain decides what it will be. This chain, in turn, sets high fees when there are a lot of transfers and low fees when there are few transfers. In any case, you pay less compared to fiat payment methods. For example, for Litecoin, the fee ranges from 0.10 PLN to 0.60 PLN, regardless of the amount you transfer.
- More secure transfers. All blockchain transactions are encrypted. The recipient and sender information remains private and does not need to be known to complete the transaction. All you need to send or receive money is a blockchain address, which is made up of random numbers and letters that cannot be linked to a specific person.
- Non-blockable transfers. Local banks can block gambling transfers for any reason. Sometimes due to local laws and company policies, it is possible that money you send to a sportsbook (or that comes from a sportsbook) can be confiscated. This applies not only to bank transfers but also to transactions made with credit cards and debit cards. Even e-wallets, which are often used extensively in the gambling industry, can be blocked. Blockchain payments, on the other hand, cannot be blocked or seized because they are not carried out through the banking infrastructure.
- More privacy. When using cryptocurrencies, you don’t need recipient details to make deposits and you don’t need to share any personal information to make withdrawals. As we mentioned above, it is enough to know the blockchain addresses. This means that you can transfer money without compromising your privacy in any way compared to fiat payment methods.
- Instant payout. Crypto sportsbooks that run on second-generation blockchains like Ethereum use smart contracts. These are programs that automatically complete another action when a certain action occurs. In the gambling industry, they are used to instantly and automatically pay out (the second action) when a player wins his bet (the first action). This means that you don’t need to submit a withdrawal request and it doesn’t need to be reviewed and approved. Your payout is completed within a few minutes after you win your bet.
- Higher odds. As we’ll discuss below, crypto sportsbooks have lower operating costs thanks to blockchain payments. This allows them to offer higher odds compared to traditional sportsbooks. For example, you are much more likely to find value bets in crypto sportsbooks. Likewise, on sites like Spin City Casino, you have the chance to play casino games with verifiable fairness.
However, it is also important to note that cryptocurrencies will have some drawbacks that arise from their very nature.
Crypto Gambling Disadvantages for Bettors
Cryptocurrencies have basically two disadvantages for bettors:
- Volatile value. The price of almost every crypto changes regularly and these changes can sometimes be quite radical. For example, your BTC bankroll, which was worth 10,000 PLN in the morning, may drop to 1,000 PLN in the evening. This makes bankroll management difficult. Stable coins like USDTC don’t have this risk, but only a few sportsbooks support them.
- Impractical use. For crypto payments, you need to be a member of an exchange, use a digital wallet, and perform constant transfers between them. Compared to credit cards, e-wallets, and bank transfers, they are very impractical to use. Also, they will require a familiarization period: learning to use cryptos can take a long time and may not even be possible for older bettors.
Cryptocurrencies and blockchain payments also come with advantages and disadvantages for operators: let’s take a brief look at them.
Crypto Gambling Advantages for Operators
When an operator starts to support blockchain payments, it gains the following benefits:
- Much lower operating costs. To offer traditional banking methods to your users, you need to work with multiple payment providers, pay each one a fee for each transfer, and rely on third parties for your payment infrastructure. This alone requires a significant investment and is an expense you have to bear every month. Blockchain is completely free: it has no owner, it is accessible to everyone, and you don’t need to invest anything big to switch to it. With crypto payments, you can get rid of a big expense item and offer much smoother payments to your users.
- More new customers. By saving on operating costs, you can offer your customers higher odds, more games, and more bonuses. In the long run, these will help you gain more customers and retain your existing ones.
In fact, casinos that run entirely on the blockchain can offer an overall RTP rate of less than 1.00% to their members – this is usually 5.00% or 6.00% in traditional casino sites.
However, you should keep in mind that as an operator, you will face some disadvantages too.
Crypto Gambling Disadvantages for Operators
The most significant challenge that this technology will create for operators will be AML policies and license conditions. Both of these forces the operator to collect and store user information and share it with the authorities when necessary. An online casino or sportsbook cannot refuse to do this. Otherwise, it could lose its license and legality. This means that one of the most important advantages of cryptocurrencies – privacy – will disappear. That is, the operator has to collect the user’s name, address, phone number, and other personal information, even if they are not needed to complete the payment.
Also, unless it runs on the blockchain, it will not be able to offer features such as smart contracts. Casinos and sportsbooks hosted on a server only support cryptocurrencies as an alternative payment method and cannot offer many of the other benefits that come with blockchain technology. Actual crypto casinos run entirely on the blockchain: they have no servers.
However, even if they are only supported as a payment method, it is clear that digital currencies still offer many advantages for both players and operators. For the same reason, this is not a passing “trend”. More and more sportsbooks and online casinos will support digital currencies, and some of them will even move their entire infrastructure onto the blockchain, which also offers many other benefits. If you are thinking about trying crypto gambling, don’t waste any more time and start today: this technology will shape the future of the iGaming industry.
