Cryptocurrency and Gambling in 2020
Cryptocurrency has had a mixed reputation over the last decade. Much of this is due to its involvement in controversial transactions, as well as in legitimate venues for trading and speculation in the global markets. While many still misunderstand the risks and benefits of cryptocurrency, its increasing global popularity has earned it the attention of the gambling industry. Nowhere is this most apparent than in the world of online casinos.
The developing interest for cryptocurrencies to be used in gambling culminated in December 2017, when the Malta Gaming Authority (MGA) first publicly called out to cryptocurrency and Distributed Ledger Technology (DLT)-based operators to apply for its highly coveted licenses. This was a massive turning point for the widespread acceptance and viability of alternative digital currencies in the highly profitable world of online gambling, in which the MGA has been and continues to be a universally respected authority. In fact, then and now, the MGA licenses the biggest online casino platforms in Europe — both for those that already use cryptocurrency as well as those that prefer to stick to fiat money. Today, the former continues to grow in number, as cryptocurrencies are increasingly becoming a more and more accepted and widely used mode of asset exchange.
By January 2020, LunarCRUSH reported that 42 cryptocurrency coins and tokens across six different blockchains comprised the crypto gambling sector. In the entirety of the crypto market, the gambling sector is the smallest, accountable for only 0.09% of the entirety of cryptocurrency use. At the same time, from October 2019 to January 2020, this tiny sector has outperformed the rest of the whole cryptocurrency market by 5.3%, leading to speculation that 2020 could be the year for the crypto gambling sector to blow up.
In the gambling industry’s efforts to use cryptocurrency, not all coins are created equal. Apart from these 42 coins, certain DLT-based currencies have been making much larger dents in the gambling industry. For instance, last year, the crypto coin Tron was responsible for $2.8 billion in gambling transactions, which earned it the nickname the “Las Vegas of the Blockchain.” During that same time period, EOS accounted for $4 billion in gambling transactions, although it suffered a massive drop in users this year as its network got congested due to its EIDOS update. Meanwhile, Ethereum, which is one of the few cryptocurrencies that can stand alongside Bitcoin in terms of investment viability, accounted for $500 million in gambling-related activity.
These developments have of course led to the increasing popularity of crypto use in gambling applications in 2020, such as the recent partnership between gaming giant Atari and esports betting firm Unikrn. This partnership enables Atari Casino and Atari Casino to provide its users with unique and skills-based betting experiences via Unikrn’s cryptocurrency-based UMode platform, which in turn gains access to Atari’s classic Centipede, Asteroids, and PONG games. In a related development, Bitcoin gaming pioneer Cloudbet has recently added USD Tether (USDT) to its roster of usable crypto coins, marking its first foray into stablecoin betting. “The market can look forward to many more new features and new coins in the coming months,” explains a spokesperson for Cloudbet. “Since launch, a fundamental part of our philosophy has been about empowering players with technologies that solve their problems. USDT and stablecoins are an extension of that.”
In short, the future of cryptocurrency in the gambling industry looks brighter than ever. And we can expect more related developments before the year ends.