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Cryptocurrency has really taken off in recent years within the iGaming industry and has established an important foothold in the world of online casinos.
We spoke with Andrey Starovoitov – Co-CEO at SOFTSWISS, Daniel Heywood – Co-founder of NuxGame, and Matt Sahakian – CSO at Technamin, to talk about what the future holds for cryptocurrency and why it is now a hugely important part of the industry.
How widespread is the use of cryptocurrency in online casinos and sportsbooks, and does it have mass appeal?
Andrey Starovoitov (AS): The use of cryptocurrencies in gambling is an ongoing trend that only gets stronger year by year. Today we can see that a certain segment of cryptocasinos is gaining a good foothold and taking over a significant market share. Crypto casinos are certainly a flagship in our client portfolio along with major fiat casinos. In terms of numbers, cryptocurrencies have grown 10% year-on-year to account for around 35% of SOFTSWISS revenue. This is a clear growth indicator on the back of the large coin price volatility, showing a gradual progressive increase in player interest in this type of deposit.
Daniel Heywood (DH): There has been a significant upsurge in the use of cryptocurrency in various industries in recent times, including finance, IT, e-commerce and more. Additionally, outside of its use in the corporate world, it has been championed by thousands of private citizens who regularly use cryptocurrencies. This is a far cry from the image crypto had just a few years ago and serves as proof of its growth.
Matt Sahakian (MS): I believe that at this point crypto is inseparable from our industry. Most reputable online casinos now offer crypto payment methods, and those that don’t certainly have it in their short-term roadmaps. Online sportsbooks jumped on the trend a bit later than online casinos, but are certainly catching up as we see the rise of crypto sports betting in the industry.
What are the main advantages of using crypto for operators and players when placing bets online?
AS: First, operators gain access to a whole new younger audience that generally does not overlap with the traditional fiat casino segment. The use of cryptocurrencies often provides a degree of anonymity, which in turn attracts VIP players and high rollers.
At the operational level, all crypto casino metrics such as acceptance rate, conversion rate and others are much higher compared to fiat casinos. For example, the SOFTSWISS acceptance rate (the ratio of successful to attempted deposits) is 99% for cryptocurrencies.
All of the above is just a small part of the benefits of using crypto in iGaming. The main advantage is that crypto is an ever-growing trend we have observed over the past five years.
DH: There are many benefits for both players and operators, with transaction speed being the most obvious. Because there is no middleman involved in the transaction process, things can be completed much faster and with fewer steps involved, compared to traditional payment methods. The additional – and significant – knock-on effect of removing this middleman is the subsequent lowering of fees, making the process more streamlined and cost-effective.
MS: The main advantage is the extra layer of security that these currencies provide, thanks to the blockchain technology they are based on. Security is always of the utmost importance to both operators and players, and crypto gives both peace of mind. The decentralized nature of these currencies also means higher degrees of anonymity that players prefer when it comes to their information and transaction history.
In which markets is a cryptocurrency solution particularly relevant?
AS: In fact, when asked which is the most popular market for cryptocurrencies in gambling, we at SOFTSWISS highlight that crypto falls into a new market of its own. And it makes sense, as the differences between crypto and fiat audiences are quite significant – the demand for transaction processing speed, availability of provably fair technology games, high game limits and even top game lists are completely different in these two segments. In general, the geography of crypto gamblers is quite large – Canada, Germany, LatAm (Brazil, Mexico, Argentina) and Asia.
DH: Cryptocurrencies are relevant worldwide. There is no market where they do not play an increasingly important role. However, they help in the expansion of the iGaming industry in developing countries in particular. This is mostly due to the strict banking regulations and restrictions within these jurisdictions that cryptocurrencies remedy.
MS: We see the Asian market as well as certain areas of the LatAm market embracing crypto, along with Africa and the US. Mexico is also big on blockchain, and is included in the top 50 countries where crypto is most popular. Countries such as Greece, Denmark, Sweden, Romania and Great Britain are also on board with the trend.
Is it all about Bitcoin or are other cryptocurrencies commercially viable?
AS: We are indeed observing new coins rising against a gradual decline of Bitcoin in the crypto basket, but this does not mean that it is Bitcoin that is losing its appeal, but rather that other cryptocurrencies are gaining momentum as a deposit method for gambling. According to our partners’ research, customer interests are shifting towards “stable coins”. Facing the crypto winter, most crypto traders have already sold the most volatile cryptocurrency, as we live in the “cash is king” era. USDT is the leader among stablecoins, followed by BUSD. As a result, in 2022 we saw that Bitcoin was not the ultimate GO-TO choice for payments. But don’t get me wrong, it’s still huge as only Bitcoin offers indisputable decentralization and payment freedom. It fell from 65% to 49% in the number of transactions on average, but marks much lower levels for new casinos with a younger player base.
DH: Bitcoin is of course the clear leader in cryptocurrency, but there are a growing number of options for players and operators alike. Customers use an increasingly diverse range, with projects such as Ethereum, Solana and Tether and others to offer the widest range of payment choices available.
MS: There was a time when Bitcoin stole the thunder in the crypto world. However, that is not the case today. There are almost 10,000 active cryptocurrencies out there. Given that not all of them are equally popular or even used, many of them such as Ethereum, Binance USD, Dogecoin, Tether and XRP are as popular among players as Bitcoin. That’s the thing about these currencies. You never know who is going to take the lead.
What does the future hold for the use of crypto in online games? Is it a passing trend or here to stay?
AS: Overall, despite the volatility we observe, the cryptogambling segment and its audience will continue to grow, as it is the speed, simplicity and a certain level of anonymity that players value most in cryptocurrencies. We can clearly see a growing interest in this niche and an increasing number of operators, including the top ones, are adding crypto to their payment methods.
DH: Cryptocurrencies are categorically here to stay; now I’m sure most people can agree on that. As the crypto industry evolves, new and more innovative solutions emerge and compete for their “15 minutes of fame.” This in turn drives more innovation. A few of these are no doubt just a passing trend, but some will stay with us for the long term and become part of the furniture industry.
MS: When Bitcoin was released as the first open source software and blockchain currency back in 2009, many thought it would be a passing trend. It’s been more than a decade now and look where we are with these currencies today. Just like any other phenomenon, it is impossible to say where crypto is going, but a decade long popularity and expansion are clear indicators that this is a journey that we need to follow closely.
