Online gaming is a booming industry in Malta offering huge opportunities and attracting several major iGaming companies across the globe. The island country has made a mark in the global gaming sector following the enactment of its remote gaming regulations in 2004 and since has been on the lookout for ways and innovation to further strengthen its online gaming market.
Virtual Currencies (VCs) and Digital Ledger Technology (DLT) have increasingly become popular with tech-savvy gaming operators and Malta is currently holding talks on the prospect of integrating blockchain technology into iGaming.
Blockchains’ Benefits to Operators and Players
Blockchain technology operates in a transparent manner, creating accessible transaction records for every game and bet placed by the player. It makes use of identity verification mechanisms and validates each transaction, reducing the risk of money laundering and fraud. This would also enhance data protection and make sure operators comply with relevant rules.
Blockchain could be beneficial to players as well. The technology adopts additional mechanisms to determine and verify the correct amount of winnings. The hassle-free smart contracts would efficiently facilitate negotiations, instant record winnings and trigger payments for the right players. This way, all parties involved would know how their pay-outs are carried out and how the results are determined.
Players’ transactions are verified via a proof of work executed by several nodes. This would make it impossible for anyone to alter values or information, avoiding manipulation of data in all transactions.
The new technology would enable the deployment of cryptocurrencies in carrying out bets which has proven to be way cheaper than dealing with banks and facilitate international and credit card transactions with real-time results for both players and operators.
Challenges for iGaming Operators
High volatility driven by constant price swings is inherent in cryptocurrencies and this would be one of the major issues that the online gaming industry would likely face. There may be conflict and disagreements between players and operators regarding exchange rates during deposits, placing of bets or winning.
The scalability of transactions on a blockchain is also significantly slower than conventional methods – only 2 transactions per second (tps) on Bitcoin Blockchain and 20tps on Ethereum, compared to PayPal’s 450tps and 56,000tps for Visa. High-traffic gaming operators would likely consider this as a major drawback, considering their need for swift deposits and withdrawals.
Changes to Regulations
As blockchain is a relatively new platform for iGaming, regulations need to be stretched.
A consultation document on the introduction of VCs and DLTs in online gaming was published by the Malta Gaming Authority (MGA) in March. There are no specific regulations in place yet as discussions are still ongoing among stakeholders such as the newly established Joint Regulatory Efficiency Board.