As payment technology advances faster and faster, cash days are counted. From digital payments to digital currencies to blockchain, we are increasingly moving towards a cashless society.
In the last few months after the pandemic in particular, the push for a shift from physical to digital money has only picked up pace. Casinos are no different and in many ways better positioned to fully embrace the move to digital money.
In 2020, the American Gaming Association published a report calling for a faster transition to cashless systems in casinos and other gaming venues. In doing so, the pandemic and government restrictions were cited as the perfect opportunity to take advantage of the future of payment technology.
But how could this work in a casino environment and what role does Bitcoin have to play in the cashless future of casino gaming?
How cashless casinos work
Cashless casinos use technology as a form of player engagement while also providing enhanced protection for players – be it at slot machines or at the tables. As a technology, blockchain offers a superior solution than other available options.
Physical chips are not being replaced as quickly, although cashless payments are proving to be advantageous, especially in the current global pandemic situation. Players are allocated a Bitcoin wallet pegged to USD or other fiat currencies to reduce the need to move and manage cash in and around the casino.
Imagine this scenario: a high roller enters a ready-to-play casino. He’s transferring money directly from his bank account to a Bitcoin wallet. He logs into the casino’s payment platform, opens a Bitcoin wallet for the casino, loads up money, and then continues to play as usual. The player transfers money from his casino wallet via a QR code to the wallet of the table and the chips are given to him. All winnings are returned to the wallet and all casino transactions are processed through the wallet as with any other transaction in digital currency. Players can redeem the tokens in their wallet like loyalty points or have them converted back into fiat currency and transferred to their bank accounts.
As an added bonus, players are automatically connected to the casino’s loyalty program so they can collect and exchange loyalty points for meals, gifts, and other perks – all of which are integral to the convenience of playing through a Bitcoin wallet.
With tokenization, cashless casinos are also possible, which create a connection between online and offline casinos and create an effective bridge between the two gaming environments. Tokenization means that physical casinos can go cashless as they merge with the online experience so that players can bet on the same account in both environments. Players can bet on the online platform – such as in the Caesars Online Casino – and collect loyalty points at the same time, which can then be redeemed in the usual way for gifts, meals and other casino benefits.
Here’s a practical use case: BitBoss
BitBoss is already leading the way in enabling cashless casinos with the help of its bridge ecosystem.
In a 2020 interview with CoinGeek, Matt Dickson, Co-Founder and CEO of BitBoss, described the three key components of Bridge and building cashless casinos through tokenization.
“First, it’s a crypto-based mobile wallet. We chose a crypto / blockchain based wallet as this is the most secure standard out there today. “
“Second, we have a hardware device that is installed in every slot machine and table game. The device for slots / EGMs speaks the SAS protocol. This allows us to bypass the casino management system that normally runs the casino. “
“The third component is a lightweight server that communicates with the blockchain. The process is easy to understand. Suppose a customer wants to send funds to a slot machine. The customer’s wallet sends a transaction to the blockchain over the public internet. The casino has a lightweight server that waits for transactions to be sent to the casino. As soon as the casino sees the transaction on the blockchain, it forwards funds to the slot that the customer is playing. This is the real magic of the blockchain. “
The advantage of Bridge is that 100% proof of ownership of funds is possible through the blockchain without the need for expensive third party administrators. Support tools make it easy to recover lost wallets, while simple reporting features give the casino complete insight into the flow of funds.
The ease of use of casino staff in processing transfers is complemented by the convenience for players to link their wallet directly to their bank account, with strict AML / KYC procedures built into the app by default. From the player’s point of view, it then becomes easy to convert money into tokens by simply transferring them to their wallet.
What about regulation?
A major advantage of cashless casinos, at least in the US, lies in the regulatory benefits of playing through tokens in wallets instead of money transfers. When it comes to funding with cash, regulators want to know about which poses a whole host of problems for casinos and gamblers.
In cashless casinos, however, there is no trading in coins per se. Rather, the transaction takes place in casino tokens, which are part of a casino loyalty program and have no physical use beyond this function. This is not about cash or physical transactions that would pique the interest of regulators. Instead, they are just wallet transfers of tokens associated with casino loyalty programs.
This undoubtedly makes cashless a more attractive option for operators, while offering players a host of conveniences and other useful benefits. In many ways, this is a no-brainer, and a big part of the reasons why cashless casinos powered by Bitcoin and blockchain are becoming the standard of tomorrow.
Bitcoin and Cashless Casinos
In a world where the need for efficiency is driving technological change ever faster, blockchain is unsurprisingly high on the agenda. Casinos, in particular, are well positioned to benefit from the transition to a cashless society, not least because of the pre-built benefits that come with blockchain and token payments in the casino environment.
Given that startups like BitBoss are already leading the way, cashless casinos are sure to see rapid growth in the next few years, and casino operators rely on blockchain technology to improve the functional gaming experience.
See also: CoinGeek Panel, iGaming Future on the Bitcoin Blockchain
New to Bitcoin? Read CoinGeek’s Bitcoin For Beginners section, the ultimate resource guide, to learn more about Bitcoin – as originally envisioned by Satoshi Nakamoto – and blockchain.