Blockchain gaming deserves regulation clarity

Published Jul 1, 2020
[5 mins read]
Blockchain gaming and crypto casinos are no longer a novel concept to gambling regulators. But they've been slow to act and this is to the detriment of the entire industry.
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Regulation, re-regulation, licensing and responsible gambling laws constantly keep multi-jurisdiction operators on their toes. They are necessary thorns in the side of compliance departments and boardrooms the world round. They keep gambling environments in check by protecting players through the enforcement of responsible gambling protocols, but they're implementation is often controversial.

In recent months, with COVID-19 by-and-large shutting down much of the industry, regulation has become even more of a hot topic. Countries have started to bring in short term measures to limit access to online gambling, while others have seen a relaxation in gaming laws a means to bring in lucrative tax revenues for the post-pandemic rebuild. As expected, operators have expressed their personal business interests, with the general tone resoundingly stating that they are being hard done by compared to industries of a similar vein.

It's apparent that there's a sea change in attitudes to gambling amongst governing bodies around the world, although this looks different depending on which continent you're in. Europe has started to reverse its dedication to a hands-off marketplace with an increasing number of laws brought in to protect players and limit the power of operators. Whether these are proportionate depends on your viewpoint, but it's clear that it's hitting operators in the bottom line. Latin America is a completely different picture, with the likes of Brazil and Chile fast-tracking legislation through their parliaments to boost an industry that they've lost to the black market.

Moving out of the shadows

What does this all mean for the blockchain casino sector? The rapidly developing niche is entrenching itself more in the mainstream by the day. Arguably, the speed at which it has jumped from peripheral crypto ‘outsider' plaything, to billion dollar industry knocking on the door of the mass market has been aided by a lack of clarity when it comes to regulation. Operating in the shadows at times, generally not by choice, crypto casinos and blockchain projects have grown fast, and this has brought challenges along the way.

Regulators have been slow to react to the boom in cryptocurrency as a gaming token. The more respected ones have opted for a ‘wait and see' approach, which despite having its merits, has led to little progress and much more ‘wait' than ‘see'. This has been to the consternation of various projects. The holy grail of the Malta blockchain gambling sandbox has come, and likely gone, as has the reputation of ‘Blockchain Island'. The UKGC hasn't been overly progressive, with casino platform supplier FunFair Technologies withdrawing its own licence application to them a couple of years ago.

In fact, legislation for blockchain specific entities has so far only really come from the Isle of Man. And this is still at its early stages. The majority of crypto casinos out there are today operate from a Curacao licence. Although legitimate, it lacks the clout that might be a stepping stone for decentralised gambling projects to jump from the periphery into the middle of the regulation conversation.

No longer new technology

And there's no doubt that crypto projects do want to get involved in that conversation. It's not their end game to remain on a long leash, avoiding the watching eye of gambling regulators the world round. Casinos such as Bitcasino.io and BitStarz are fully-fledged, premium operations in their own right. And they should really be treated as such. They act in a responsible manner, which at present involves operating in-line with industry-wide best practice, despite not having to. Responsible gambling is put ahead of profit, and players respect them for it.

Crypto gambling is a multi-billion dollar industry, and it's only set to continue on its trajectory to the moon. Bitcoin, Ethereum and TRON blockchains are leading the way with gambling stakes a major proportion of their overall transaction volume. Importantly though, these blockchains aren't novel anymore. Most industries have taken a look at decentralised tech and realised that it can be incorporated beneficially into their own futures. Gambling, as it has done so often in the past fifty years, should be leading the way on this.

We've attended enough trade show panels to know that regulators are well aware of what blockchain gambling is. They've been alerted to its benefits; fairness, transparency, traceability, time and time again. Now it's their time to act. These casinos are here to stay and they'll continue to smash revenue records and bite into the fiat incumbent market share for so long as players are disillusioned with current industry practices.

Yes, at the start, the world of bitcoin was somewhat cowboy. This is no longer the case though. Taxation measures are in place, the SEC has a solid understanding of its workings, bad apples have been knocked from their trees, and we're left with a healthier blockchain, and gambling, environment for it.

Next moves

So what happens next? Well, it's clear that conversations are still going to need to be forced by the crypto side. Perhaps they can come together and coordinate lobbying efforts rather than picking their battles one by one. But in the meantime, the bigger casinos are still in profit, and it's only the regulators and their jurisdiction's tax coffers which are missing out.

The world of blockchain gambling wants clarity, and while regulators offer only murkiness, they shouldn't expect to see fiat players surge to the fairer, decentralised space and out of their control.

 

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