Should the gaming and poker industry embrace cryptocurrencies?

The rise of the gaming industry since the start of the century has been nothing short of remarkable.

Poker has become hugely popular during this time as well, with sites such as PokerStars and PartyPoker not only operating online games but organising tournaments around the world with huge cash pools at stake.

The success of the industry was highlighted this year when Denise Coates – CEO of Bet365 – broke records receiving $423 million as her yearly salary. On top of that, Triton ran a poker tournament in 2019 with a record buy in of $1 million.

Sports betting is another huge market. If you are watching a televised sports match in the UK you will likely see numerous adverts related to betting during the ad breaks.

This has all been enabled by the internet and rise of mobile phone apps. Whereas, punters once had to visit a betting shop to place a wager this has now been replaced by a solid internet connection and an app on your phone making betting easier than ever.

Governments and charities have voiced strong opinions about this rise. Gambling addiction is an horrific illness that can destroy families and even lives. Despite this, much like alcohol, there is a strong desire to keep it legal but at the same time try to reduce the risks involved for the consumer.

Issues surrounding regulation in gaming and poker

Gaming and poker companies face another difficulty however. As other maligned industries such as the rising cannabis industry many banks are adverse to providing support and handling the money of companies involved in these industries. This not only provides issues for companies but also the consumer themselves.

The UK has recently announced that credit cards will be blocked from gaming websites as a measure to reduce the risk of gambling addiction. Consumers also face lengthy pay-outs and stringent checks on the source of funds, particularly for large amounts. Much of this relates to Anti-Money-Laundering (AML) laws that were implemented in the 1970s.

The Financial Crimes Enforcement Network (FinCEN) are the administrators and enforce these laws. Amounts above $10,000 must be reported to the relative authorities. The vast sums of money entering and leaving the gaming market means that it is particularly susceptible.

Questions have been raised as to the $10,000 amount in the modern day. Due to the effects of inflation, what was once a large sum of money in the seventies has become much less valuable.

This has had the effect of many more large amounts being processed. Three consequences arise from this. Firstly, many more people are suffering from an invasion of privacy into their funds. Secondly, due to the increase of people transferring over the threshold banks now have much more admin work to complete. Consequently this extra admin work has led to further charges for customers.

Can cryptocurrency help?

Bitcoin prides itself on being an uncensorable form of money. Payouts from gaming companies cannot be stopped by banks as they are not required. Money can flow in a much simpler fashion. This comes with caveats though.

Regulators are unlikely to take kindly to companies attempting to subvert their laws. This is particularly true when the majority of nations still have not come up with comprehensive cryptocurrency regulations.

This dilemma is likely to evolve in the coming years. There is a clear crossover between those who play poker and gambling along with the cryptocurrency community. People are, in essence, gambling on altcoins to rise in value similar to a casino game.

Another aspect is those who have become “bitcoin rich” and have disposable income and little to spend it on. Gaming, both online and at casinos, is an appealing option. Yet converting their cryptocurrency to traditional currency remains an issue. Combining the two could prove to be a lucrative avenue.

Conclusion

The gaming industry and cryptocurrency appear like a suitable match for each other. The strict regulations surrounding gaming and the lax regulations surrounding cryptocurrency could prove to be hurdles in this potential partnership.

Yet there is little wonder why under-serviced industries are actively looking into the best way to harness cryptocurrencies to improve both their business and the customer service they can provide.