The gaming industry is all about the customer. Whether traditional or virtual, all business that cater towards gaming must provide top notch customer service. Players are looking for a seamless experience, immediacy and privacy. Casino operators want secure and irreversible payment methods.
Together, players and operators wanted a consistent and trusted service. Players and operators want their winnings when the game is played.
In the business world, disruption theory describes an innovation that creates a new market from the over served players that grow and displace the current market leaders.
There are predictions that bitcoin will disrupt the gaming industry by providing services (gaming and other virtual online casino options) to risk takers that are not served by traditional casinos.
Industry executives are aware of bitcoin, but generally discuss the technology along the lines that IBM discussed computers. They are aware of its existence, but do not think bitcoin will disrupt their current business model.
However, for insiders, there are some key differences between traditional and bitcoin casinos that set the foundation for possible disruption down the road.
- Bitcoin casino operators do not need to maintain bank accounts.
- Provably fair casino operators do not need regulatory agency to confirm legitimacy, credibility and security.
- Bitcoin payments open the gaming market to regions of the world that are underserved by traditional banks.
The biggest takeaway is traditional casinos need to operate within the boundaries of lengthy and onerous gambling rules and regulations. Players need to fund accounts through standard bank accounts. Casinos need to report winnings to government authorities (in excess of set standards that may vary by jurisdiction).
Bitcoin creates the opportunity to providing gaming services to underserved parts of the world. For example, many developing countries do not have established and secure banks. In particular, people that do not have reliable transportation to get to banks to deposit money. There are roughly 2 billion individuals that have the same intrinsic risk taking desire, however, no access to gaming.
Bitcoin casino operators can provide a legitimate gaming experience for cents, which is affordable for much of the world. Traditional casino operators cannot. Therein lies the opportunity for disruption theory to take place.
The disruptive innovation is the underlying blockchain (or the technology that validates the value of bitcoin). There are some high level details and trends that help promote the disruptive nature of bitcoin operated casinos.
- Bitcoin payments reach 100% of the world’s countries.
- Coinometrics estimates about 40% of all bitcoin transactions are related to online gaming.
- Bitcoin-only casinos are the largest bitcoin-related web advertising.
- There over 150 bitcoin-only online casinos in operation.
The trends set the foundation for bitcoin-operated casinos to disrupt the traditional gaming market. In addition to reaching new and growing markets, bitcoin operators are not encumbered by regulations. Although this is subject to change, many disruptive innovations occur in industries with significant regulations because entrenched companies are slower to make changes.
For bitcoin and business aficionados, the gaming market is a great place to watch and see disruption in action.