For online casinos, the introduction of blockchain technology has faced a number of challenges. Being a relatively new concept in data infrastructure, combined with a lack of awareness across the industry, there is a degree of confusion and uncertainty towards it as a solution.
In igaming however, some pioneers believe it can tackle the intrinsic problems facing the gambling and gaming verticals. The sector continues to face issues of trust and player safety – with the calculation of odds, stakes and payments just a few of the concerns.
At nChain, they’ve recognised that integrating blockchain technology such as their Kensei solution on igaming platforms, has drastically alleviated the industry’s reputational issues around player protection.
So, is it not just for crypto?
The common misconception is that blockchain technology is limited to cryptocurrencies and crypto exchanges – and this has discouraged many operators from using it.
However, Hill stresses this couldn’t be further from the truth. Blockchain technology enables a trustless system without relying on a central authority. With blockchain, every aspect of a transaction is compiled into a block. This process of logging, storing and distributing across a network of computers gives operators and regulators the ability to verify data for all parties involved.
“People assume that blockchain is crypto,” he explains. “But there are two sides to blockchain. I got involved in crypto back in 2017 and very quickly realised there is another side to this technology. Cryptocurrencies are built on blockchain and use some of the same attributes, yes, but the utility application side of the technology is a whole other side.”
Hill says blockchain based technology can be utilised in the gaming vertical for player protection, safer gambling, responsible gaming, and other areas of compliance and probity checks.
“The best use for this technology, in my personal opinion, would be as a utility application, encouraging companies and operators to be more transparent, more accountable, and to focus their efforts and energies in player protection and safer gambling.”
He argues blockchain is slowly becoming essential, having matured in a time where player safeguarding has gained additional scrutiny from regulators.
“What the regulator is now looking for is for operators to be more proactive in identifying potential at-risk players and interacting with them in a positive way in order to educate before they self-exclude.
“Once a player self excludes from any website, there’s already a deeper problem.”
From a regulatory and player protection perspective, it is therefore crucial to have a record of everything that happens between a player and operator after the first marker of harm is triggered.
The blockchain technology, Hill emphasises, then notarises everything that happens and protects the underlying data, by storing it in an immutable, distributed ledger. This ensures that the data is there, time stamped for perpetuity for the player, the operator and any other permissioned third-party access from regulators.
nChain estimates that the global online gaming market is forecast to grow to £160bn by 2026. However, Hill stresses that player safety is paramount if the regulated market is to reach this figure and avoid stringent regulations that reduce the appeal of licensed offerings.
“Gambling is not going to go away,” he explains. “All you’re going to do is drive it underground and offshore if regulators don’t listen to operators and suppliers.”
“Our platform encourages the operator to be transparent and accountable by giving them the ability to identify and protect potentially at risk players and intervene proactively before self exclusion.
Getting there before the curve
nChain’s use of blockchain reframes it as a utility application rather than the underlying technology for a cryptocurrency, something Hill argues was not being done before the supplier’s Kensei platform launched in 2021.
One of the platform’s key selling points is its APIs, which allow for transparent integration between an operator’s existing data management processes and the BSV blockchain.
“We sit in between the complexities and math of blockchain and the traditional legacy systems that are currently operating in the gambling sphere,” Hill explains. “Traditional blockchain technology is incredibly complex, and the bridge we’ve built has taken an enormous amount of time and effort to build.
“The network nChain has built is incredibly scalable and cost effective, plus it’s fast. Now is the time for the operators to get on board.
“Eventually, in my opinion, everybody will be using blockchain without even knowing about it.”
Where is the most education needed?
However, he admits that more education is required for industry operators and suppliers to realise blockchain’s potential.
Hill points out that many of the conversations happening at ICE London in April centred around player protection.
“Every supplier, regulator and legislator were talking about it – even the North American states and market were being open about how they were behind the curve of the European operators and regulators.”
Since he feels blockchain provides a potential solution for this and other pain points, he sees the educational component around the benefits as key to accelerating adoption by showing how it can streamline processes.
What are the other benefits of blockchain in igaming?
“At nChain we take out the middleman of sifting through traditional forms of data storage to try and get to the information”, says Hill. “Blockchain technology can streamline and automate operators’ processes as well as assist with cost reductions.
“Buzzwords like player protection, education and sustainable gameplay are such huge parts of the industry, and by implementing blockchain you’re protecting your players – and that’s obviously a huge positive.”
The proactive interaction with the player also helps to educate players to continue wagering within their entertainment zone, leading to more sustainable gameplay. This creates loyalty and lifetime value for operators. That in turn helps businesses grow wallet share, while also making potential pain points such as affordability checks simple, fast and reliable.
As a result he’s confident that adoption of blockchain will happen, slowly but surely.
“Blockchain is the plumbing,” he adds. “It will become like the internet. We won’t be able to survive without it.”
If other suppliers follow suit in deploying blockchain technology solutions, the future of the industry is being shaped into a more compliant, player-safe environment. This, after all, is key if the industry is to maintain its growth and avoid regulatory headwinds.
Nick Hill is a seasoned igaming professional with over 20 years of experience, including as chief operating officer at gaming operator and platform provider EveryMatrix. Nick has singular insight into the needs of the gaming industry and an ability to anticipate emerging trends as a result of his work on the development and launch of the first fully automated sportsbook; unique processing products; and content aggregation platforms making use of innovative technologies.
Nick has used these insights to identify the specific issues of the igaming industry that can be solved using blockchain technology. As nChain’s sales director, Nick has successfully introduced blockchain technology to industry participants to address supply chain management (SCM), responsible gaming (RG), anti-money laundering (AML), know your customer/business (KYC/B) guidelines, and source of funds identification.
Original article: https://igamingbusiness.com/the-building-blocks-for-a-safer-industry/
