Major iGaming and Betting Operators Still Shying Away from Crypto

The world of online betting and gaming has been revolutionized by technology over the past decade. However, when it comes to adopting cryptocurrency, many major iGaming operators remain hesitant. This article explores the reasons behind this reluctance, focusing on the challenges of volatility, regulatory concerns, and the ongoing need for fraud prevention.

The Rise of Online Betting

New Jersey’s Launch

The landmark decision by the United States Supreme Court allowed individual states to decide their gambling laws, leading to the launch of online sports betting in New Jersey in August 2018. This event was marked by significant fanfare, blending traditional casinos with online platforms, setting a precedent for other states.

Payment Challenges

Initially, players faced issues with deposits and withdrawals due to banks and credit card companies’ caution in processing these transactions. Although the situation has improved, it highlighted a critical area where the iGaming industry needs to evolve—payment methods.

Diversifying Payment Options

Current Solutions

While some operators like Mansion Group offer various non-traditional payment methods (Boku, iDeal, Paysafecard), these options are often secondary to the primary focus on games and betting markets. This lack of emphasis on diverse payment solutions presents a challenge for integrating cryptocurrencies seamlessly.

Volatility Concerns

Cryptocurrencies are notorious for their volatility. Casinos operate on fine margins, and the fluctuating value of cryptocurrencies can pose significant risks. For instance, a 5-10% change in a matter of hours can severely impact the profitability of games with slim house edges, such as blackjack, where the edge can be as low as 0.03%.

Regulatory Hurdles

Fraud and Money Laundering

Countries with liberal gaming laws, such as Canada, the UK, and Ireland, are increasing pressure on gaming companies to combat fraud and money laundering. Implementing Know Your Customer (KYC) policies, credit checks, and other regulatory measures directly contradicts the decentralized nature of cryptocurrencies.

Awaiting Regulatory Clarity

Many gaming operators adopt a “wait and see” approach regarding cryptocurrency. They are cautious about investing in the mechanisms needed to accept and manage crypto payments, fearing that future regulations might render these investments obsolete. This conservative stance reflects a broader industry trend towards regulatory compliance and risk management.

Future Prospects

Potential for Integration

Despite current challenges, the integration of cryptocurrency into the mainstream iGaming industry seems inevitable. As regulations become clearer and technologies evolve to mitigate volatility, the adoption of cryptocurrencies may become as common as using Visa or PayPal.

Industry Evolution

For now, the major iGaming operators are likely to remain cautious. However, smaller, more agile companies and new market entrants are more likely to experiment with cryptocurrency, paving the way for broader acceptance and integration in the future.

Conclusion

The reluctance of major iGaming and betting operators to adopt cryptocurrency is rooted in concerns over volatility, regulatory compliance, and fraud prevention. While the path to integration is fraught with challenges, the potential benefits of embracing cryptocurrency are significant. As the industry evolves, it will be essential to address these challenges to realize the full potential of cryptocurrencies in the iGaming sector.