Crypto innovation in land based casinos
The next wave of growth in the gaming industry is absolutely coming from the digitalisation of payments
I saw this post on my LinkedIn this morning from Allan Stone, and it’s spot on, especially the heated debate it sparked. The next wave of growth in the gaming industry is absolutely coming from the digitalisation of payments, ie crypto – I don’t think many see how quickly this change is happening. Of course this “overnight transformation” took many years of hard work (for yolo 2014, for stake 2017 etc). I believe the biggest difference here is that I always say, crypto is not just a payment method, it's a way of life (and thinking). So many people refuse, or are scared, to imagine how things could be done better and more efficiently. But maybe it really is the tiktok / insta generation who are used to instantaneous satisfaction, with short attention spans, who prefer the new ways of interaction which is really the attraction. If instant gratification is the desire, then instant deposits and payouts are expected.
The bottom line is you can not satisfy this with fiat currency, because :
the fiat rails in the world can not physically facilitate this and
legacy psps are too expensive for these movements.
The Trustly and Brite Payments of the world have largely changed this in some markets and it's simply a better way to transact as a player (from an instant bank account to account perspective). Further still with fiat, you are still not the true custodian of the deposits you have accepted from a customer and to me (coming from online poker days, with the issues stemming from cross cage settlement), this is the key issue. If you are natively taking a crypto payment, that deposit comes into your own custody immediately, full stop. This is not a fractional reserve, this is not T+5 settlement delays (again with a payment processing fee). With crypto, the player pushes the deposit to you, so there are no charge backs, and those funds come directly into your treasury and gives you all the freedom in the world to process a player withdrawal instantly from that treasury.
With fiat, you are never fully in control of your player deposits in real time, so it innately causes an issue that you can not fully control the instantaneous speed of player withdrawals.
With crypto, there is no need for creative treasury management, which removes with forex, swaps, balancing and time delays and gives you instant access to your funds
If we think back again to the generational shift towards a tiktok mindset, these new players do not know what cheque books are, they probably don't have credit cards, and more so, they are most likely using Revolut and have never walked inside a physical bank ever and have no intention of ever doing so. In Revolut, it's now a 1 click transfer of funds to a @username rather than having to copy paste 7 fields including IBAN, Swift codes, Bic codes and guess what, that Revolut transfer is instantaneous. The same is on wechat, botim, telegram wallets, as well as openwallet, phantom wallet, metamask and exodus - transfers are immediate.
So whilst commentators may look at UI / UX innovation as the key metric / differentiation and others may dismiss this “innovation” as a way to bypass regulatory frameworks, its actually an innovation in mind set of understanding what the customers want and satisfying that desire quickly. That said, i do believe there is a significant difference in the look and feel of a traditional casino (think Ladbrokes, Fanduel, Tabcorp) and that of a new age casino (Stake, Bitcasino, Whale, Roobet, Gamdom, Shuffle and even Dabble and the pickem products). Most of these operators have their own full stack platform and products and do not rely on third party providers for their infrastructure so they can adapt their products quickly based on the real life customer feedback. If players want to play and stream plinko or marbles, then put the game front and centre and make a song and dance about it. Make sure your employees celebrate the customer wins, when they have beaten the maths / rtp. Make sure you payout the winnings instantly and congratulate the player.
The games are still the same in the end and all a casino really has to do (apart from acquiring and retaining a customer) is to provide a framework to process deposits and withdrawals (quickly) and to launch third party content (except of course if you make your own original games). The majority of the playing time is spent on this third party content, so don't waste valuable time trying to be pixel perfect on your home page - simply focus on efficiently helping the customer through the player journey!
That said, if we look at the first part of the journey again, the key here is processing deposits and withdrawals instantaneously, whilst ensuring that an operator can fulfil all necessary licensed regulations and obligations.
We are extremely excited to announce that, following close consultation with the Estonian gaming regulator (EMTA), our land based casino in Tallinn, the Bombay Club (bombayclub.com), is legally allowed to accept Eurocoin (EURC is MICA compliant) as a deposit and withdrawal method.
The introduction of EURC to our land based casino represents a huge step in improving the payments flow in the traditional land based gaming industry.
We are harnessing the power of a new age in digital technology and will allow players to use a stable, regulated, legally compliant and trusted digital currency at our casino. To this end, we’ve moved the physical cage from the casino floor, into the players mobile phone inside a digital wallet cashier.
This is a crucial, and timely, step forward for gaming. By improving the flow of how deposits and withdrawals work in a physical casino, and in fact understanding how players would prefer to interact with money movements, we are moving the industry away from traditional cash transactions – opening up a world of possibilities. New customers, new innovations and a more streamlined and enjoyable experience.
Given the strict licensing and regulatory procedures found in the EU, players naturally undergo a comprehensive verification process; KYC, source of wealth, source of funds, affordability and AML checks. These checks are completed (with ongoing transactional monitoring) before players receive a Soulbound NFT inside their digital wallet. This immutable NFT (or think of it as a digital membership card) will serve as their identification to access the casino, will grant them access to the gaming floor and ability to play, as well as their casino chip purchasing or selling transactions directly at the table.
Notice the QR code for deposits on the roulette display
The power of digital technology will also open a new playing experience. Once on the gaming floor, players are able to scan a QR code on the table, whether it be blackjack or roulette, to purchase chips directly from their wallet. When the session is finished, dealers receive the chips back (under careful surveillance of the eye in the sky) and the dealer scans the player’s QR code to cash out, instantly transferring funds back to their wallet. Given that everything is digital and programmatic, full audit control and procedures are in place for any movement of funds on the ledger. This also allows for much stronger and intelligent BI and data analysis to happen on a real time basis, which means we can continually improve the individual player experience.
This represents a major leap forward, and could form the foundation for a totally new kind of gaming experience. No delays, no friction, no cash – just a seamless and transparent process that brings traditional gaming into the digital age.
The numbers speak for themselves: last week we hosted a High Rollers Poker Week, with a $25,000 buy-in main event. 80% of deposits made that week were in crypto, 17% were by bank transfer, and 3% were via credit card. The demand for digitalisation is there, it's now a question of who can supply it in the most efficient and regulatory compliant manner.
This shift toward digital payments is happening faster than anyone expected. We are already a fully cashless casino. The player’s mindset is changing, the attention spans are smaller and we are driving that efficiency to give the players the best possible experience.
It’s a lot of fun to disrupt an industry – again.
Tim