Online casinos have been around for quite some time now, pretty much since the internet took off back in the 1990s. Interestingly, however, the online casino industry didn't really do much in the way of gambling innovation as one might have otherwise expected.
Given that online gambling has frequently been enveloped inside of grey market industries across the globe it is frequently relegated to incorporating inside of B-tier jurisdictions. This has lead to some amount of less than optimal outcomes for online gambling participants relative to the normal brick and mortar (B&M) casinos found across the globe.
And with online casinos, there are a number of factors that they could in theory compete on relative to their real life counterparts, but in practice, this has not largely been the case up until Bitcoin gambling came around. The main areas that an average online casino can seek to disrupt the gambling industry in general is to compete on the following:
- Lower House Edge or higher Return-To-Player (RTP) on games.
- Improved fairness of games.
- Anonymous game play options.
- Superior rewards programs for VIPs.
- Improved overall convenience (easy cashouts, deposits, all from home)
We'll go over each of these points in detail, one by one.
House Edge / Return To Player
One might think that an online casino would have a much cheaper operation to run than a brick & mortar casino which could lead to cheaper options for players. In some small respects, this might be true, but ultimately, this has proven to be largely untrue in aggregate. There are many reasons why this is the case. Payment processors siphon a lot of the money both on deposits and withdrawals from gambling operators which ends up being a huge expense to casino operators. Secondly, while B&M casinos generally deal with cash and exchange for chips, online casinos have to deal with online payment methods. This leads to a disproportionately larger amount of fraud and chargebacks for the online casino to deal with that are far less common in the traditional B&M casino sphere.
Online casinos also have multiple other expenses to tack onto the list which could include the licensing costs for gaming technology, very expensive marketing campaigns to draw in customer acquisition and a whole host of other examples. At the end of the day, online casinos in the fiat-based industry have it more rough than one might expect at first glance. This makes for a high cost industry which leads not much room for disruption relative to B&M casinos.
Enter Bitcoin gambling. Bitcoin casinos hit the scene almost immediately with the advent of Bitcoin back in 2009 starting with Satoshi Dice. By eliminating virtually every single expense listed up above, the cost of running one's own casino dropped dramatically. And almost all of these savings didn't actually end up in the hands of casino operators but were actually passed directly to consumers in a positive case of gambling disruption and innovation. Many games offered by Bitcoin casinos have a house edge set as low as 1-2% which is almost impossible to get in either online casinos, let alone B&M casinos. Bitcoin gambling really set the grey market for disruption and innovation by being the perfect contender to deal with all of these problems faced by casino operators the past couple decades brought on by government regulations.
Game Fairness
Interestingly with game fairness, online casinos actually fare worse in this category relative to their B&M counterparts. This is because a lot of live games use randomness that can be seen by participants; a roulette ball on a roulette wheel, card decks that are manually shuffled and so forth. Additionally, all of the games are independently third party audited by various agencies that are generally within B&M casinos, based on a country's jurisdiction. Meanwhile, online casinos operated on a mostly wild-wild-west approach and did whatever they wanted. They may have designed their own Random Number Generators (RNGs), intentionally rigged games, used shady third party auditors or none at all, or anything else shady. Some operators may have even had the best of intentions and produced their games incorrectly with bad coding in their software. With gambling entities often based out of B-tier jurisdictions as stated earlier, the gaming fairness of the online establishments would always be kind of a toss-up.
Given the large amount of gaming fairness uncertainty in the online casino industry, something had to give. Some Bitcoin casinos were the first to largely incorporate provably fair Bitcoin gambling as the standard. The math behind the provably fair games were a bit tricky, but the first Bitcoin adopters tended to be of the nerdier computer savvy bunch in the beginning so it all worked out for everyone. Fast forward to today and some Bitcoin casino providers are still exclusive to probably fair games while others may have a mix of both provably fair or closed sourced games and some may only offer closed sourced games. But the option does exist nonetheless.
And provably fair technology is the gold standard, the first technology to be better than both B&M casino technology and normal online casino technology by a long shot. By making it cryptographically secure and certain for both players and operators, everyone wins. There ends up being no way to rig the games against players, which lets them play in a fair environment. This ends up being much more secure than B&M environments because even those either aren't as truly random as provably fair is, or can in some cases be intentionally rigged games, which the player would never be the wiser about.
All of that said, if one does intend to play at any online casino, they should demand to only patron websites using entirely 100% provably fair technology or they expose themselves to unnecessarily high levels of risk for no reason with so many websites available at their fingertips.
Gambling Anonymity
For many players, being able to play games online, anonymously, would strictly be an advantage. Some gamblers may not care about their privacy, but others may. And having the option to choose how visible you are on either a financial or visible level to other players or the casino itself is something many online gamblers may cherish as innovation. However, online casinos have not been able to offer these types of services since the beginning of time for the same reason that payment processors have been at the crux of the problems as stated earlier.
Nearly all fiat based online casinos require Anti-Money Laundering / Know-Your-Customer (AML/KYC) for their customers to protect themselves against fraud, multi-accounting and many other types of abusive behaviors that can hamper a casino's ability to operate. However, Bitcoin is relatively straight forward since it's a very simple and irreversible protocol. Once a confirmation on the blockchain network has been achieved, it's nearly impossible to reverse the transaction. And given that virtually anyone can open up an online Bitcoin casino and accept risk-free deposits nearly instantly, this has allowed for yet another innovation in gambling anonymity.
Some users may not value their privacy with Bitcoin or casinos, but some will. And having the option exist is always a benefit to consumers to allow them to do what's the best fit with their personality or situation. This also grants bonuses over the B&M casino setting as well since obviously a person is required to be physically present there. This is by shear nature not anonymous, so there's no choice in the matter here.
VIPs
In hyper competitive markets, the consumer truly gets put at the forefront of everything. By being a high roller in any environment, be that in a B&M casino, online casino or even a Bitcoin gambling casino, the biggest whales tend to receive some serious VIP treatment. There are truly remarkable stories about the types of perks that some of the Vegas VIPs can receive while gambling in those hotels.
However, all of the VIP treatment does come at a cost which is an overall estimation done by the B&M casinos about net profit. If they expect a VIP to lose $1 million, they might be willing to then comp the VIP $250,000 in bonuses which can range from free rooms, to meals, spas, concerts, clubs and all sorts of other ongoing promotional deals.
But keep in mind that this does ultimately all come out of the cost associated with the house edge, which will tend to veer most strongly towards the Bitcoin gambling scene. And in the Bitcoin gambling scene, VIPs can be treated remarkably well as well. But the gambling throughput by any Bitcoin whale will have to be much larger to make up for the house edge differential that is seen between the live and online game types.
Whether you want to be treated best by having all of the luxuries tossed at you from playing high house edge games or to receive the ongoing benefit of playing lower house edge games will be up to you.
Convenience
Part of the internet's rise in popularity over the past few decades is ultimately of no surprise looking back in time because it's very convenient. By being able to order things online, get information quickly online and plenty of other services, it simply out matches many older technologies that required physical presence. This was one of the mainstay benefits for online gamblers relative to casinos, even in the early days. Of course, this convenience and comfort from one's own home does come at the expense of the social aspect and entertainment that a live B&M casino offers, but each person will have their own preferences. Some may enjoy both activities depending on the situation they are in.
But it must be said that online gambling has been rife with problems with payment processors. It's troublesome for not only the casino side but also for the consumer side. Figuring out how to get an e-wallet account and deal with the entire situation from A to Z is easier said than done, especially when compared to simply handing cash to a casino cage and getting chips valid for play nearly instantaneously.
To some extent, Bitcoin solves this issue, in other ways, not so much. If one already owns Bitcoin or other cryptocurrencies, Bitcoin gambling is truly the dream come true with very easy and fast deposits and withdrawals. However, the process of owning and acquiring Bitcoin in the first place may be exceedingly difficult and give users a similar experience to loading money onto an online casino in the first place. For the casual user, it probably comes out as a wash between which is ultimately more convenient to use. For the high volume and serious gamblers, the overall long-term benefits will start to accrue and become more beneficial to Bitcoin users over time.
In Summation
It's no secret that Bitcoin gambling has been one of the backbone pillars to Bitcoin's growth since the very early days of it's existence. It has helped solve many problems that have plagued the gambling industry for years by simply because so cheap and convenient to use for not just casino operators, but also it's players. The large incentives have also pushed a lot of players towards Bitcoin adoption due to much cheaper gambling rates and attractive RTPs that can only be found in the cheaper to operate Bitcoin casino model.
That all comes almost exclusively at the expense of having to acquire Bitcoin and having to then own and manage Bitcoin. For many users, they may not believe in the technology of Bitcoin or may prefer a more stable currency that they have a history of both knowing and trusting. For these players, both traditional online casinos and B&M casinos will always be there. However, Bitcoin has been rather well suited for the high-risk gambling types because adding Bitcoin price volatility into the mix of Bitcoin casino gambling offers extra gambling all in one. Something that fairly well suits a proper gambling personality in the first place.
The decision is ultimately up to the gambler, but innovation and superior game types clearly push in the direction of Bitcoin to date. Where this all ends up in the next decade, time will only tell.
This article was brought to you by the classic Bitcoin Dice game on MintDice. Originally posted on MintDice.com.