Online gambling is one of the most lucrative markets on the planet – especially now that there is a continuously growing percentage of the world’s population with access to the mobile internet. Nevertheless, this industry has caused several disputes. Its proponents posit that legal gambling – a predominantly cross-border activity – encourages international trade and rakes in tax revenue. They also argue that taking risks and betting is a part of human nature, and people should be allowed to spend their money however they see fit. However, opponents of gambling have pointed out the issue of addiction and rising levels of dishonesty in the business.
Backlash notwithstanding, gambling is bound to keep increasing rapidly. In fact, the market has been growing at a compound annual rate of 9% – three times higher than the global GDP growth rate over the past seven years.
In an interview with Filip Poutintsev, CMO of Bitbook.ag, a blockchain-based gambling and betting platform about to kickstart its token sale, he said it comes as no surprise that many blockchain entrepreneurs are so keen on penetrating the gambling market– aspiring to “disrupt” it in crypto parlance– with the help of distributed ledger technology.
One might wonder if there are real benefits to using blockchain technology in the gambling world. Although transparency and immutability are sometimes unnecessary in gambling, blockchain projects offer these features to disrupt and revolutionize their market.
Blockchain might benefit the gambling industry in the long run. Poutintsev has stated that the advantages of blockchain are usually over-exaggerated, and there’s still a long way and many years ahead before areas like HR or commodity trading begin to see transformations by this technology. Online gambling is quite different because the issues that needs to be resolved in order to clear the industry’s reputation are very visible. Poutintsev believes that blockchain can solve these issues quite effectively and easily.
Most individuals see online gambling and betting as inherently unfair. Casinos can only earn revenue when players lose more often than they win. Many studies have been carried out to show that users do not really trust online casinos, because they see them as a black box that swallows money. Many users are of the belief that these online sites possess special features that turn the odds in the house’s favor. Other disadvantages include high fees, both commissions charged by the payment system and the house cut.
Even when a player has won fair and square, casinos find it difficult to part with money. A lot of cases abound, where it takes many days or even weeks for them to pay players, and sometimes those who win big are blocked from using the site again because of the size of their winnings. People who simply got lucky are seen as a business risk. Another issue is that, it is a tedious task trying to make deposits to play, because some banks despise gambling institutions. Stories have been told about people who were unfortunate to have their bank accounts closed after depositing money into an online casino.
Poutintsev believes that change will not come easily and that blockchain can not magically transform gambling into a wonderland that allows players win most of the time. However, there is sufficient reason to believe that blockchain is able to solve these problems.
He also said,
Blockchain system will keep an account of all games played and bets staked, their results, and the amounts that were won and paid out to winners. Players have unrestricted access to the transaction history to confirm that the system paid out all that was due and that the odds were not manipulated.
One of the most important issues in online gambling is seen to be trusted; therefore blockchain is the most reliable solution.
He also made it clear that what is being said about blockchain systems helping to build trust among participants, while at the same time being trustless, is not a contradiction: Both statements can be applicable to blockchain gambling in different ways. In the beginning, there will still be casinos and actual companies that run platforms, such as Bitbook.ag – and distributed ledgers will make it possible for players to verify that the casino plays fair. Later, actions will be transferred to more decentralized betting and gambling systems, with not-for-profit structures at the center operating in a regulatory and protective role, which will definitely be trustless. Bitbook.ag is in the process of developing such a system.
Poutintev made note of low fees as well as easy cross-border payments as further advantages of blockchain.
Being independent of banks will convert more and more users across the world into the fold of legal gambling, as they currently have to use stealthy services because they are unable to pay with their credit card. Of course, this same legal principles affect blockchain casinos like Bitbook.ag as to traditional sites – if gambling is illegal in your residence, you should not break the law.
While speaking on the connection of Bitbook.ag as yet another game-related blockchain project, Poutintsev argued that while there are a lot of gambling-related blockchain projects, Bitbook.ag is at a better advantage.
When asked about Bitbook.com, he said,
Bitbook.ag began more than two years ago. Since then, we’ve bootstrapped the development first and then accumulated funds from private investors. This prevented us from joining the “rush to a token sale”, a common curse for most blockchain projects, which flock into the market with very little ideas. Rather, we have put together a great team determined to achieve development. As a result, we are elated about our achievements in these two years: In September 2018, we released a functional beta version of the platform with more than 200 casino games – slots, roulette, poker, blackjack etc. – and a large sports-betting module. We are currently enjoying a loyal customer following and a real cash flow, and we have succeeded in establishing partnerships with several companies in the business, including game developers and DonBest, a provider of sports-event odds. So yes, I have come to the conclusion that there is definitely space for Bitbook.ag in this market, since we are among the few who have a working product.
Another crucial step in the development of Bitbook.ag is developing a peer-to-peer (P2P) betting system.
Due to the fact that casinos dictate the games to be played and which kind of sports one can bet on, the system will continue to be fully centralized. Users should have the opportunity to add their own events and games, which should not be restricted to sports, as any type of event can be the object of betting.
The idea of betting on other events is a rapidly developing field, most especially in terms of oracles, which provide odds. Bitbook.ag hopes to provide a space where members can bet on events added by other members and play casino games against one another. Consequently, Bitbook.ag is launching a token sale to enable it to finance the creation of the P2P betting platform.
It is mandatory, for ethical and legal reasons, to ensure compliance if gambling sites become decentralized. Bitbook.ag CEO Andres Martinez, who is an expert on international compliance and corporate law in both gambling and the cryptocurrency business, stated that total decentralization is difficult to achieve in practice, due to the licensing, taxation and regulations in individual countries. As a legal entity, the company is mandated to obey local and international laws. The only way to escape this is to become completely decentralized, open source, and peer-to-peer, like Bitcoin, so that no single individual would lord over the platform and thus no one would be liable or could be prosecuted.
Since the company intends to abide by laws and regulations, neither of the above options are valid. Poutintsev concluded that Bitbook.ag plans to use Bitcoin to make gambling fair, lower costs, and prevent fraud.
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