How Cryptocurrencies Have Changed the Modern Gambling Scene
Last Updated on November 14, 2024
The last ten years have brought a handful of advances and events in the betting world. Most of these can be credited to the popularity of cryptocurrencies. It feels like there are hardly any betting sites that don’t accept Bitcoin or at least some form of blockchain payment.
With the surge in interest and value with cryptocurrencies, some modern gaming operators have pulled up stakes and moved into what we now refer to as the ‘crypto casino’ or ‘crypto sportsbook’ space.
So, what’s the big deal? How has betting with Bitcoin changed the landscape of online gambling? In this guide, I’ll give you a complete overview of the why and the how behind cryptocurrencies and their impact on the online gambling world.
Understanding Crypto Gambling
Crypto casinos and sportsbooks operate similarly to traditional platforms. The major differences include the use of cryptocurrencies like Bitcoin and Ethereum and the operation of a specific blockchain network. These gambling sites offer a blend of anonymity, security, speed, and fairness. To be honest, it’s hard to find a mix of all four on traditional sites.
The Rise of Crypto Casinos in New Zealand
The last few years have seen an unbroken expansion of crypto casinos, which have now established themselves in the New Zealand online gambling market. There are no laws surrounding crypto casinos in New Zealand at the moment, and this makes the platforms operate in a ‘grey area,’ which, coincidentally, has been beneficial to them.
Another feature that has driven the popularity of crypto casinos is decentralisation. Crypto payments prevent banks and government institutions from monitoring the proceeds made from betting. Decentralisation opened up the market to a wider audience, especially to the younger demographic.
How Does Crypto Gambling Work?
Crypto gambling follows a straightforward process that involves depositing crypto, wagering/betting, and potentially withdrawing crypto winnings.
Here’s a detailed look at each step:
1. Depositing Crypto
Before you can start crypto betting, you are required to have a wallet to store your crypto tokens. You have the option of selecting between a software, hardware, or online wallet.
Whichever option you choose, ensure its security protocols are industry-standard. With a wallet in place, you can fund your betting account in three simple steps.
- Buy Crypto: This is the swapping of NZD for the desired worth of cryptocurrency.
- Sign up at a crypto casino/sportsbook: There are many online platforms available to New Zealand players. Register at a secure, licensed, and reputable casino.
- Deposit tokens: Transfer the bought tokens from your wallet to the gambling platform’s address. The process is lightning-fast, giving you instant access to gaming.
2. Placing Bets and Playing Games
Once your deposit is processed and your account is credited, you can begin betting on sports or playing casino games.
- Sports: Place bets on various sports events, including rugby, football, and cricket. The odds are usually provided by companies using cryptographic systems.
- Casinos: The games available at traditional casinos are available at crypto casinos. The only difference is that they are built on blockchain technology, which makes them provably fair.
3. Withdrawing Winnings
The goal of playing at a casino is to have fun and potentially win. In a scenario where you win and want to withdraw your funds, follow this process:
- Navigate to the cashier section to request a withdrawal.
- Provide your wallet details for the payout.
- Confirm the withdrawal request and wait for the transaction process.
7 Key Benefits of Cryptocurrencies in Gambling
Cryptocurrencies have transformed online gaming, with 7 key aspects in which they have positively impacted the modern gambling ecosystem:
- Anonymity and player privacy
- Transaction fees, speed, and security
- Provably fair gaming
- Accessibility to unbanked populations
- Decentralisation
- Innovative gaming opportunities
- Protection against chargebacks
Anonymity and Player Privacy
Traditional platforms are bound by regulatory requirements, which makes them collect and verify players’ information. This is not the case at crypto casinos, as they allow anonymous gameplay and betting. During sign-up, only a valid and secure password is required. Additionally, deposits and withdrawals through crypto wallets conceal financial details.
Transaction Fees, Speed, and Security
There are 3 main things to think about when using a casino: fees, speed, and security. The first aspect relates to the different crypto options available. With these, you can always find one that has very low or even no transaction fees. Next, you can always rely on fast and secure transactions with crypto payments.
Provably Fair Gaming
At a regular casino, the games use Random Number Generators (RNGs) to verify the outcome. However, these generators have been hacked a couple of times. The most common attack is the use of cryptographic systems to exploit weaknesses. However, this doesn’t work for crypto casinos, as they are built on immutable smart contracts. Therefore, the results are fair as they can’t be altered.
Accessibility to Unbanked Populations
Some people find opening and keeping a bank account stressful. For an unbanked individual, gambling for real money is difficult. Cryptocurrencies have fixed this issue, making it possible for people without bank accounts to gamble. All that is required is a crypto wallet, which takes less than five minutes to create. To prevent volatility of your stored token, it’s best to use a stablecoin pegged to a fiat currency.
Decentralisation
Cryptocurrency networks were designed as decentralised systems, eliminating third-party (banks and governments) interferences. As the player and gambling platforms interact directly, the transactions are recorded in a public immutable ledger, which builds a level of trust. Also, by taking the third parties out of the equation, crypto casinos enable faster and more efficient transaction processing and game results.
Innovative Gaming Opportunities
Leveraging blockchain technology, developers have been able to create games that provide players with entirely new experiences. The two major innovations in recent years are decentralised casinos and NFT-based games. Decentralised casinos operate without intermediaries, giving players the opportunity to verify the games’ fairness via blockchain records. NFT-based games transport players to a whole new world. In this world, you can own unique, tradable in-game assets and collectables with real-world value.
Protection Against Chargebacks
Online gambling platforms have occasionally been defrauded by players who trigger chargebacks with credit card payments. This is impossible with crypto transactions, as once a payment is made, it can’t be reversed. With chargebacks eliminated, crypto casinos reduce financial losses and enhance operational security. This ensures a more structured system for the operators and punters.
Challenges and Risks of Using Crypto Gambling Platforms
Although crypto innovations have changed the gaming scene for the better, they have certain negatives. Before reviewing these drawbacks, I must state that the good outweighs the bad. That said, here are 3 main challenges and risks associated with playing at a crypto casino or sports betting website:
- Volatility
- Regulatory uncertainty
- Security concerns
Volatility
The crypto market is highly unstable, as the value of a token can fluctuate dramatically over short periods. As a player, this means that your winnings can lose value in the blink of an eye, reducing the payout when compared to the amount won.
This can go both ways, as market upswings can increase the value of winnings. Due to the market being unpredictable, playing with cryptocurrencies is riskier than fiat currencies.
Regulatory Uncertainty
New Zealand’s legal framework provides inadequate guidance for gambling in cryptocurrency. This creates uncertainty for both players and betting operators. Although operators are supposed to comply with a plethora of existing laws and regulations, these do not specifically mention the use of digital currencies.
Consequently, it’s difficult to even know where to begin with compliance. Uncertainty also affects players, who speculate about how New Zealand’s legal landscape could pivot if new rules were to be enacted. Could such rules make operators comply more tightly going forward, or could they allow more leeway to operators and thus less protection for players?
Security Concerns
Although blockchain technology is secure, exchanges and wallets are still vulnerable to security breaches. Crypto wallets have become targets for hackers due to the large sums of funds they store. As a player interested in crypto gambling, ensure you sign up with a reputable exchange that implements strong security measures.
Things to look out for include SSL encryption, secure payment protocols, and two-factor authentication (2FA). This way, you can rest assured that your funds are safe from cyberattacks.
Future Outlook of Crypto Casinos and Sportsbooks in New Zealand
The future of cryptocurrency platforms seems bright, with their adoption growing steadily in different industries. The iGaming industry promises to be a major beneficiary of this new technology, with a number of platforms expected to use crypto and related technologies in the coming years.
Innovation in blockchain technology also seems set to revolutionise the gambling experience itself. With ‘provably fair’ games, decentralised casinos, and NFT-based experiences (among many other promised innovations), blockchain technology promises to offer gamblers something they don’t experience too much in the current industry: better betting features.
Still, for all this to happen, the law has to be on the side of the platforms and the technologies they’re using. As of now, the problem for New Zealand Crypto and iGaming enthusiasts is this: New Zealand’s gambling laws don’t cover the crypto industry at all.
Author’s Bio: Dominic Greenholt is our New Zealand Payment Method Expert with 10+ years in the gambling industry. After earning a degree in Financial Management from the University of Canterbury, he felt drawn to the rapidly evolving gambling industry. Dominic is recognised for his in-depth knowledge and unwavering reliability, making him an invaluable asset in the fast-paced gambling industry.
