The COVID-19 crisis is forcing global businesses to navigate a period of uncertainty and turbulence, however, digitalisation and new currencies may mean the path to stability is clearer for the iGaming sector than it is other industries.
CryptoProcessing investigates how this transformation could impact payment patterns in iGaming and why punters might enjoy a bitcoin flutter…
The Las Vegas Strip has been closed for business for more than a month – and could stay closed for up to six months more, according to some experts.
Europe’s gambling hotspot Monaco reopened its venues in mid-March however they too are facing a 95% drop in revenue for Q1 2020.
It’s not surprising therefore that both casino operators and gamers are turning their attention to online gambling.
Even those users who don’t normally gamble could also start joining iGaming sites in the search for new types of entertainment.
Watching Netflix for hours every day can get tiring after a while, and the adrenaline rush of online poker or slots can seem like a relief from all the anxiety cause by the global pandemic.
Implications for payments
As everybody can figure, offline gamblers and bettors are used to paying with a debit card or in cash.
However, when they move online, they are confronted with a whole array of new payment options – several dozen on some sites.
Some of these exotic payment methods are regionally popular e-wallets, such as Skrill, EcoPayz, and Qiwi.
Most of these are geared towards users from certain countries and some KYC procedures can make it difficult for many international punters.
An alternative option for these newcomers could come in the form of cryptocurrency.
Over 100 online casinos already accept Bitcoin – the world’s largest digital coin with a market cap of $140 billion. Other top-20 crypto coins, such as Ethereum, Bitcoin Cash, Litecoin, Dogecoin, and Tether, are also widely supported.
Interestingly, there are only a handful of major crypto payment providers serving all those casinos.
As an example, we here at Cryptoprocessing.com serve over 220 merchants globally, processing over €250m in payments – proving the demand for cryptocurrencies.
Why switch to crypto?
Paying in crypto on iGaming sites carries several advantages for users:
- Availability: crypto is the easiest option in those countries where gambling with a credit card isn’t allowed. A case in point is the UK, where even the popular financial app Revolut had to halt iGaming transactions after a nationwide ban.
- Speed: crypto transactions aren’t subject to stringent bank controls, so they are processed many times faster. For example, we are capable to offer instant deposits in BTC, BCH and ETH, while withdrawals can take as little as a few hours.
- Low cost: the average Bitcoin transaction fee hovers around $0.5, some coins charge almost no fees. This applies to transactions of any size, regardless of the country.
- Global access: apart from the countries where online gambling is banned, users from anywhere in the world can pay with crypto on equal terms.
For casinos themselves, cryptocurrency payments are also much more than a marketing technique.
They can allow merchants to save up to 70% in processing costs compared to traditional card payments – mainly because crypto transactions don’t involve an acquiring bank.
This is a significant advantage because iGaming businesses pay much higher acquiring fees due to their high-risk nature.
Integrating crypto and fiat
Understandably, many gambling operators are still cautious about cryptocurrency. Bitcoin is a highly volatile asset, and many merchants are reluctant to hold it on their books.
Some crypto payment providers, including ourselves, address these concerns by integrating fiat support into their gateways.
Before the pandemic, the online segment accounted for less than 10% of the total gambling market.
In the next couple of years, this figure can grow much faster than the originally forecasted CAGR of 11.5% a year.
At the same time, players’ habits will change, too, with a mass move away from bank cards and to cryptocurrencies.
It will be interesting to see how offline casinos will react to this shift in payment once they reopen. Will they integrate crypto and expand their online presence? We’ll know in a few months…
To further discuss the role of digital currency in helping the igaming sector through crisis and find out more about CryptoProcessing’s expansive offering, visit the firm’s stand at next week’s SBC Digital Summit.
Information about how to register and discounts are available on company group passes at the event’s official website: https://sbcevents.com/sbc-digital-summit/