Insight: Why blockchain could be a winner for the gambling industry

Insight: Why blockchain could be a winner for the gambling industry

Wednesday, June 15, 2016 Totally Gaming
Hans Lombardo will discuss blockchain technology at next week's GamCrowd event

A new platform that could improve security, reduce costs and speed up transactions: it sounds like an odds-on winner for the gambling industry.

With thousands of bets or deposits made each second across the world, gaming companies must always look for ways to improve processes. Yet many are failing to fully embrace the potential of blockchain currencies, such as bitcoin and ethereum, according to Hans Lombardo, Director of Chain-Finance.

Lombardo, who will speak at a GamCrowd event at the Hippodrome Casino on Tuesday, June 21 during London Tech Week, told TotallyGaming.com that while there are already perhaps more than 100 bitcoin-based casinos - most prominent being the recent launch at Bitcoin.com – he believes that the gambling industry is still to be convinced about the merits of the distributed ledger technology.

“Quite simply, blockchain databases are amenable, secure, efficient and can reduce costs,” said Lombardo, whose company provides intelligence on the development of blockchain technologies.

“Blockchain strengths are that it is a shared ledger and immutable record that removes intermediaries, validates and authenticates users and interactions, and interactions can be enforced with Smart Contracts.

“I think perhaps some see it as a threat by some gambling operators because they become a third-party. It should be noted that gambling is not alone in this view. These things take time, particularly as it is a complicated subject and not something the man on the street knows too much about.

“To give an example, the EtherPoker site might be an innovative example of how blockchain technology can enhance gambling. It gets around some KYC/AML issues as money and cards are not touched by a centralised website. The money bet is put in an ethereum smart contract for the duration of the game and then is distributed to the winners after tournament ends, or when a player leaves a cash game. The result is cryptographically secure P2P poker.”

Many of those that do know about blockchain currencies view them suspiciously as they offer an alternative to the cash-based systems that have been trusted by governments, businesses and the public for thousands of years. Bitcoin, as the most prominent cryptocurrencies, has been the subject of some controversy in a number of jurisdictions, but the open and anonymous nature of that option should not put people off the entire sector, in Lombardo’s view.

“Not all blockchains are like bitcoin,” he said. “They can be closed and permissioned based systems. A permissioned system is one where users must have permission to use the system. Bitcoin is an open, permissionless system.

“There are some drawbacks to block chain currencies, for example at present ethereum can only handle around seven transactions per second, compared to the 2,000 that Visa can undertake. These are issues that must be resolved as advancements are made.” 

Lombardo will be the moderator of a panel session entitled ‘How is blockchain technology impacting the gambling industry?’ at the London event, with items for discussion including how the UK’s capital could become hub for these currencies. He will be joined by Eddy Travia, chief executive of Coinsilium, Adam Vaziri, a partner at Diacle, and Nick Garner, founder at OSHI bitcoin casino.

Looking ahead to the session, Lombardo said he believes attendees from the gambling industry will appreciate how they can benefit from block chain.

“I’m hoping that we get a good discussion going on how blockchain can help gambling operators,” said Lombardo. “I want attendees to understand that blockchain is an option for them, and is well worth investigating.”

London Tech Week: ‘Our sector’s technology standards compare with those of Amazon – it’s time we let the world know’ - says GamCrowd's Chris North

* The GamCrowd conference takes place on June 21, from 8.45am-4.30pm. The conference is one of over 200 events taking place throughout the capital between 20-26 June. As part of GamCrowd's partnership with Clarion Events for Pitch ICE and EiG/GiGse LaunchPad, ten FREE passes are available for start-ups - email info@gamcrowd.com to see if you qualify. For more information click here.

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