From 2018, regulations for blockchain-based gambling are being planned.
The Maltese Governing Authority (MGA) has unveiled plans to legalize the application of blockchain technology in the gambling industry. The initial set of regulations is expected to be ready by the first quarter of next year. Blockchain is the primary component of digital currencies like Bitcoin, which has been considered a groundbreaking technology by various industry professionals.
With information technology services accounting for a substantial portion of Malta's GDP, the MGA is amongst Europe's leading regulators for online gambling. The government presumes that this significant sector will be influenced by cryptocurrencies in the foreseeable future. The MGA feels that the blockchain technology is advanced enough to enact legislation. In an interview, MGA CEO Joseph Cuschieri highlighted the advantages of integrating blockchain into online gambling:
"Blockchain technology can be incorporated into online gambling and offers a sturdy platform for a transparent gaming economy."
Despite the promising prospects, several questions remain, such as how transactions would be processed and overseen, how gaming restrictions would be applied, and how taxes would be levied. For Malta, embracing blockchain in the gaming industry is about more than introducing a new payment method for online casinos. Their ultimate goal is to become a global leader in blockchain technology.
Cryptocurrencies, which rely on robust encryption, like Bitcoin and Ethereum, are celebrated as innovative advancements by some. The decentralization of the verification process in blockchain systems alleviates the need for trustworthy central authorities, like banks, to oversee the flow of funds. Each unit of cryptocurrency records the transaction history and ownership details, which are confirmed by every user in the network.
More subtle aspects of blockchain technology appeal to the gaming industry. Removing transaction fees and streamlining payment processing are promising benefits. Additionally, cutting out bureaucratic hurdles, like exchange fluctuations between national currencies, is another possibility.
But not every stakeholder is celebrating the potential of cryptocurrencies in the gaming sector. The Gibraltar regulatory authority is not pondering any new guidelines based on crypto. Instead, they view state regulation and anonymous methods of payment as incompatible. Phill Brear, head of the GBGA, questions the motivations behind the Bitcoin system:
"We consider some of the blockchain thesis paper's claims to be misleading and false, based on unfounded anecdotes about internet gambling unrelated to licensing and regulation."
Cryptocurrencies' future success is uncertain, as their worth is derived from public trust and intrinsic value. While notable alternatives, like Bitcoin and Ethereum, have been capturing attention due to their skyrocketing prices, the long-term sustainability of these virtual currencies is debatable. If investors withdraw their support, prices could plummet significantly.
Yet, the gambling sector has started to endorse blockchain technology. Casinos have begun to open using this technology, with presentations at industry fairs urging caution against not following the trend. Regardless, the enthusiasm for blockchain in the industry could be short-lived.
However, the potential for blockchain to pose a threat to online casinos could be a downside. Sophisticated blockchain systems like Ethereum could enable direct peer-to-peer gambling without the need for a virtual croupier. In essence, players could create their own game rules through smart contracts and transact cryptocurrency units amongst themselves. Thus, not only banks face the threat of disrupted business models, but casinos as well, potentially making the blockchain fad precarious.
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Source: www.onlinecasinosdeutschland.com
