Crypto gambling has been around long enough that many people who follow online gambling are familiar with it. Most do not know the details of how it works, but they at least know that it exists. They also know there are plenty of online casinos willing to accept cryptocurrency deposits.
More interesting are those aspects of crypto gambling that most people don't know about. As with most things, the crypto gambling devil is in the details. You have to dig below the surface to understand what really goes on in the crypto gambling world. And by the way, this is not to suggest that it is all bad. Rather, it's just to say that there is more to it than meets the eye.
This post will take a look at crypto gambling in more depth than most of our other posts. The goal here is to familiarize readers with cryptocurrency gambling, why some casinos embrace it while others do not, and the benefits and risks it offers players. So strap yourself in and let's get started.
Standard licensed casinos
Much of the ignorance surrounding crypto gambling is related to the online casinos that offer it. There are basically two types of casinos in terms of the law: licensed and unlicensed. This also happens to be the first demarcation line within cryptocurrency gambling.
A licensed casino is one that operates with government authority. It can be located in any jurisdiction in which gambling is legal. Individual jurisdictions set their own regulations and expect online operators to adhere to them. They license operators, usually on a 1-3-year basis, with renewal heavily dependent on following the rules.
Licensed casinos can deal with cryptocurrency deposits and withdrawals in one of two ways:
- Non-Exclusive - The non-exclusive model combines cryptocurrencies with other payment methods. A non-exclusive casino site may except BTC and BCH as its only crypto options. Alongside those options are others: credit cards, bank transfers, electronic wallets, etc.
- Exclusive - What we call an exclusive casino accepts deposits only in cryptocurrency. Sometimes the industry refers to these operations as Bitcoin casinos, primarily because BTC is their token of choice. A Bitcoin casino still might accept other coins as well; they do not accept fiat payment options in any form.
If you have been around the online gambling world long enough, you know that cryptocurrency-exclusive casinos are in the minority. In fact, it is not even close. They are so small in number that they can be hard to find at times. But they are out there.
As to which type casino is better, it is a matter of preference. Some gamblers just prefer multiple payment and withdrawal options. They want to be able to deposit BTC when they have it and use their credit card when they don't have enough coin. They also want access to fiat options just in case the value of their crypto falls too far.
Unlicensed 'dark' casinos
Unlicensed casinos are another matter altogether. These are sometimes referred to as 'dark' casinos due to their tendency to operate on the dark web. At any rate, they are not licensed by any government authority. It may not even be known where they are located. Unlicensed online casinos are completely independent from any jurisdictional control.
This makes a difference when you are talking cryptocurrency payments and withdrawals. For starters, consider one of the reasons many gamblers choose to deposit cryptocurrency: privacy. Perhaps it is illegal to gamble where they live. Depositing BTC gives them access to a casino without anyone knowing. In cases where gambling is legal in a particular jurisdiction, someone might still deposit BTC so as to avoid giving out bank information.
An unlicensed casino operates outside of the control of government authorities. Whether or not that is legally and morally acceptable is up to you to decide. But if that is the kind of casino you are looking for, you're probably the type of person who would prefer to make your deposits and withdrawals in crypto.
Unlicensed casinos are happy to deal in cryptocurrency because it further insulates them from government scrutiny. It is simply easier to keep themselves hidden if they are not taking payments from banks and credit card companies. This seems to suggest that unlicensed casinos are more likely to be exclusive than non-exclusive in their payment options.
Dangers of the dark web
The legitimate online gambling industry tends to discourage players from seeking out Bitcoin casinos on the dark web. The fact is that the dark web is so named for a reason. A lot of criminal activity takes place there, which is why its purveyors work so hard to stay hidden.
Years ago, the best way to access crypto gambling sites on the dark web was to use the Tor browser. The Tor browser is a hyper-secure browser with encryption built in. It is a favorite among dark web users because it does an incredibly good job of keeping out snooping eyes.
These days, there are other options. For example, a VPN does more or less the same thing. Tor browser fans say VPNs don't do as good a job. They may have a point, but a VPN is generally good enough to allow gamblers to visit casino sites on the standard web and still protect their identities.
Getting back to the dangers of the dark web, they are very real. Gamblers seeking out unlicensed casinos on the dark web are at risk of being victimized by:
- thieves and scammers
- money launderers
- unscrupulous casinos.
One of the big concerns of playing unlicensed casinos is the risk of being cheated. A licensed casino must demonstrate that its games are fair. There are multiple ways to do so, but that is not the point. The point is that licensed casinos have to make a lot more effort to prove their honesty. Unlicensed casinos do not. They are unregulated and simply do as they please.
Cryptocurrency and gaming platforms
Going one step beyond licensed and unlicensed casinos brings us to the concept of gaming platforms. For starters, did you know that most online casino sites don't actually own or host their own games? Rather, they sign on with gaming platforms operated by some of the biggest names in gambling. Though we will not list those names here, you would recognize them if you saw them.
This reality influences crypto gambling quite a bit. Why? For the simple fact that some gaming platforms will not allow their games to be played with crypto deposits. Platform owners may object to crypto deposits because they see them as too unstable. They do not want to risk the financial health of their own networks by allowing cryptocurrencies to float around alongside fiat.
This explains why some online casino sites don't offer crypto payments even though doing so would be financially lucrative. The licensing agreements they have with their suppliers simply do not allow it.
The other side of that coin is an emerging industry built on blockchain gaming. This nascent industry is still in its infancy, but it is expected to grow significantly over the next 5 to 10 years. At its foundation is the concept of building an entire gaming platform on blockchain.
Blockchain for everything
Game and platform developers in this new industry are committed to using blockchain for everything. They design games with blockchain as the foundation. In so doing, they are creating a system that produces a permanent record of every single play.
A blockchain-based video slot would record every spin of the reels on a distributor ledger, creating a permanent record that could not be altered at any point in the future. By sharing keys between casino and player, the chain can be used to verify fairness.
Off chain, the only way to verify fairness is to submit a game to an independent tester and let them put it through its paces. Blockchain takes proving fair games out of the hands of third-party testers and gives it to players themselves.
Moving on, blockchain for payments should be obvious in this sort of environment. Accepting only cryptocurrencies makes it easier to guarantee safe and secure payments with speed. However, a blockchain-based casino does not necessarily have to limit payments to crypto. Fiat payments could be facilitated through a separate payment network but still be recorded in the blockchain ledger for accounting purposes.
Of course, a casino's entire accounting system would be on chain as well. That makes for accurate and timely reporting, better security, and significantly lower risk of fraud.
A comprehensive concept
Hopefully, you now understand just how comprehensive the concept of cryptocurrency gambling is. It runs far deeper than depositing BTC so you can play your favorite video slot. In fact, it goes even deeper than has been described in this post. There is yet another topic we haven't talked about: how regulations affect cryptocurrency gambling.
Perhaps that will be the topic of a future post. In the meantime, take a closer look at cryptocurrency and gambling. You might just find that depositing BTC, or some other coin, is more to your liking than fiat. Crypto gambling already has tons of fans around the world. You could be the next one to join the club.