Insight

Blockchain (R)evolution

Reuben Portanier, Director of Caledo, a DLT, legal and tech advisory firm, shares his thoughts on the application of blockchain in the iGaming industry.

How do you see distributed ledger technology having an immediate impact on an iGaming company’s business? 

The iGaming sector has over the past year or two predominately looked at how to use cryptos rather than coming up with innovative ideas of how to exploit blockchain technologies.

There is a plethora of applicable uses for iGaming businesses, some of which are available on the market, such as KYC and Identity Management solutions which use the blockchain to aggregate KYC documents from various sources, including gaming operators, while having the players maintaining control on who to share their due diligence data with.  

This provides a quicker route for player registration and verification. Gaining ground in popularity are blockchain based RNGs which provide players and regulators with increased transparency, as for instance the provision of RTP ratios on a live basis, which would be an enabler for player retention or acquisition on the basis of leveraging a badge of transparency, fairness and trust.  

In the near future, we will see smart contracts becoming an essential element in the relationship between gaming operators and affiliates, as the nature of the affiliate operator relationship lends itself very well for smart contract applicability, such as automating payment obligations for pay per acquisition but especially for revenue share models.

 

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Would you agree that blockchain can be a regulator’s dream come true?

Definitely! I am aware of three regulators that are currently experimenting with DLT applicability, including how to automate compliance and monitoring. In this sense the MGA is leading the way through its sandbox project. It makes more sense for a regulator to mandate operators adopt blockchain for secure, immutable and traceable forensic data, such as gaming transaction logs, financial transaction logs and player activity logs, rather than rely on today’s architectural set-ups.

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Looking to the future, how do you see the gaming industry mostly benefit from blockchain?

One of the operators’ biggest headaches is how to cope with multi-jurisdictional licence compliance. As time goes by, jurisdictions are forking out specific requirements rather than converging, making multi-jurisdictional compliance a nightmare. The use of DLT may be a solution to alleviate this issue, particularly if regulators agree to create a blockchain-based platform where operators’ data and documents can be shared with the operator’s consent to really implement the ‘non-duplication of controls’ principle. 

Notwithstanding that we have multiple national licensing systems, regulators are starting to understand that if they do not allow and widen multi-jurisdictional liquidity, their national markets will struggle to remain viable. Through the use of distributed ledger technologies, shared multi-jurisdictional liquidity will become even more possible as regulators would have a far more transparent view of what is happening. In this case, blockchain would be an enabler for the regulators to widen shared liquidity Europe-wide. If we add on smart contracts to this multi-jurisdictional liquidity, each country would be able to collect its share of gaming taxes in an automated fashion!

On the predictions markets area, in the future we could see the removal of centralised structures and a newly found transparency that can create new markets and achieve new accuracy levels. In responsible gaming we could easily see a European centralised self-exclusion register if this was politically agreed upon. We will need to see how these will evolve also in context of the advancements in other technologies too, particularly AI and IoT. 

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