The online gambling industry has experienced significant changes in the last decade, rapidly transforming into a multibillion-dollar industry valued at $8.3 billion in the UK in 2023 and projected to grow to $12.7 billion by 2032. The industry’s rapid success can be linked to widespread changes to laws and regulations, which made online gambling more accessible. But there’s another factor transforming the industry: smart contracts.
These are changing the trust, security, and profitability of the industry, among other benefits we’ll explore here, helping people feel more confident in gambling online by addressing concerns that platforms are rigged to take their money. Let’s dive into smart contracts and how they benefit the industry.
What Are Smart Contracts?
Smart contracts are code integrated into websites or digital systems to carry out a specific action based on a predetermined agreement without requiring human intervention. This code automates processes so that when a specific step or action occurs, it triggers the completion of another agreed-upon action, or, in other words, it carries out the contract agreement. The code utilises blockchain technology, which supports cryptocurrencies, to encrypt processes and enhance security.
Smart contracts have been utilised to streamline operations in many settings and situations. These include monitoring supply-chain systems, sharing clinical trial data among healthcare professionals, processing mortgage transactions, and making royalty payments in the music industry. Of course, smart contracts are also used in the online gambling industry for payment transactions.
In online gambling, smart contracts are secure and automatic ways for an organisation to process payouts or payments. They are written in a site’s code to automate the process when set requirements or steps are taken. When a game, such as a slot game, has a winning result, the payout is automated to the player based on their bid and immediately goes to their account. It also does the opposing action, withdrawing the bid amount from the account when the player loses a bet.
What Are the Benefits of Smart Contracts for the Online Gaming Industry?
Smart contracts are proving to be valuable tools across many industries. For the online gambling industry, the benefits are numerous, allowing for greater efficiency, accuracy, trust, transparency, security, and operational savings.
Efficiency
With the entire fulfilment of payment completed automatically, smart contracts make online gambling significantly more efficient. Once a bid outcome is determined, payments can occur immediately, whether it involves paying out or withdrawing funds. This concept also works for all forms of online gambling since the terms of bidding processes are included in the code. Whether a player is betting through a sportsbook or casino, smart contracts enable a streamlined system that eliminates the slow process of another person verifying outcomes and releasing payments.
Accuracy
Since the fulfilment of agreed-upon actions is preset within an online organisation’s code and there is no human intervention (aside from placing the bid), the entire process is less susceptible to errors. The pre-established guidelines reduce opportunities for mistakes, meaning smart contracts allow online gaming sites to be much more accurate than they might be with a person or third party facilitating the process.
Trust & Transparency
Smart contracts ensure adherence to fair gameplay standards. They are also an immutable part of a digital platform’s code, ensuring that contract rules or programming cannot be altered to favour one party over another. This protects players and gambling organisations while building trust between them. By implementing smart contracts, gambling organisations build trust among players that their online platforms uphold fair gameplay and payment processing standards and regulations.
Smart contracts further enhance trust by providing transparency over every aspect of the gambling process, offering everything from an overview of a game to its outcomes and their impact on the player in terms of payouts or losses. They clearly articulate the terms and conditions for a payout or withdrawal and share this information with players. In addition to fostering trust, they also reduce the need for third parties to review the payment processes or game results. For example, smart contracts eliminate disputes and ensure automatic payouts when playing with real-life dealers, removing the need for intermediaries.
Security
Leveraging blockchain technology provides a more secure method for online gambling organisations to conduct transactions, reducing opportunities for hacking or fraud. Blockchains store and encrypt data records related to asset tracking and transactions. This information is only accessible to those with the correct permissions, and no one with access to the ledger can alter the stored data. These blockchain qualities extend to smart contracts, ensuring a secure and documented payment process for online gambling transactions.
Operational Savings
Since smart contracts automate processes, they create many opportunities for operational savings for online gambling organisations. They eliminate the need for third parties to process or manage transactions and can also protect the organisation from potentially costly human errors, creating a more profitable platform.
Conclusion
By offering these significant benefits, smart contracts are transforming the online gambling industry into a more efficient, secure, transparent, and profitable sector. They enhance player protection and transparency while improving organisational performance, creating a win-win situation for both players and organisations.
By upholding standards for fair gameplay and providing evidence of this through smart contracts for games and sportsbooks, online gambling organisations are removing the doubts and worries concerns that have long been associated with them. This fosters an environment where players feel more confident placing wagers on online platforms, leading to increased profits and further transformation of this massive and rapidly evolving sector.
Our Founder and Chief Enthusiast: With a background that’s a wild mix of tech enthusiasm, finance, and a short stint believing blockchain was a new martial arts technique, Matej is the heart and soul of TheBlockchainBrief.com. He’s got more passion for cryptocurrency than most people have for coffee, and that’s saying something.
