Cryptocurrencies and the gambling market have found many ways to intersect. This has led to innovation and it improved the user experience for online players. Chances are that this fruitful cooperation will continue in the years to come, as both BTC and online are rising in popularity.

In this article, we’ll discuss the growing trends in the world of online casinos and how they’ll shape the market in 2024. Some of these are long-time coming, while others are recent and driven by the latest innovation.

Increased Adoption 

Many online casinos have already adopted cryptocurrencies as a payment method. Many also base their gameplay mechanism on blockchain technology. These technologies are now widespread and known to be safe and easy to use. The use of cryptocurrencies is also more regulated than before.

We’re likely to see an increased adoption in the years to come. Casinos will allow the use of many different cryptocurrencies, they’ll provide bonuses for those using them, and transactions will get lower. This also means that there will be a wider pool of potential players.

Provably Fair Odds

Using cryptocurrencies allows players to have provably fair odds for their games. When playing Bitcoin roulette online, as well as other games of luck, players need to know what are the exact odds of winning a spin. Open-source codes allow roulette players to make their bets based on a clear understanding of their chances.

This will become the norm, as players focus more on roulette games of luck and players are looking for ways to make informed decisions. BTC casinos will be expected to provide information about odds, volatility, and return to player rate, as the most important data a player needs to bet

Integration of Decentralized Finance (DeFi) in Gambling

Decentralized finance has already found its way to the gambling industry and its uses will expand in the years to come.

DeFi liquidity pools can be used to facilitate betting. Users can deposit Bitcoin into a pool. The odds of various outcomes are determined by the pool’s composition. After the event’s outcome is decided, the winnings are distributed based on the initial deposit ratio. This ensures that the odds are determined by the users, not a centralized entity.

Decentralized finance will also be used to predict the outcome of events. When the event occurs, the shares’ value changes, and users can cash out based on their holdings.

The Rise of Sports Betting

The following year will be a year of sports betting. The rise of bookmakers alongside traditional casino games has a complex and long history. Young players are more interested in sports betting than before and eSports are now widely accepted as events to bet on.

The use of blockchain technology has made the odds much clearer and allowed the odds to change in real-time as the games progress. In the end, the use of AI has made sports betting a science. The players have at their disposal countless statistics and projections made based on those statistics to allow them to make informed bets.

Introduction of In-Game Rewards

Gamification of online casino gameplay will be a huge trend in 2024. This includes side-quests, mini-games, and various in-game rewards. The introduction of these features is especially welcomed by young players who are used to computer games and find traditional casino games to be somewhat monotonous.

This will make the gameplay experience more enjoyable and suitable for playing on mobile devices. It will also drive player loyalty and help bring in new players. The odds of winning these mini-games are also transparent and fair due to the use of blockchain technology.

Enhanced User Experience

Online betting is already made to mimic the look and feel of visiting an on-the-ground establishment. This is accomplished through live betting and the flashy aesthetic players have come to expect when gambling.

In the years to come, the use of augmented and virtual reality will only further improve this trend. These technologies are already available but not widely used. Soon, VR and AR devices will become household items and the Bitcoin gambling industry will be the first to cash in on that.

Social Betting

Tournaments and social betting will be a big deal in 2024. One of the biggest downsides of using online Bitcoin casinos is the alienating nature of the experience. Online casinos are finding ways to remedy this by focusing on tournaments and social aspects of betting.

Live events can be streamed from an actual on-the-ground casino. The players make bets in real time and they can interact with each other as the game takes place. Chats, video calls, as well as augmented reality meetings all can be used to enhance this experience.

Tools For Responsible Gambling

Online casinos are going to start paying more attention to responsible gambling. They will dedicate resources and tools to prevent betting too much, chasing losses, and increasing the size of the bankroll. These practices foster trust and loyalty from players and regulatory institutions alike.

These tools include betting caps, automated betting strategies, and automated stop losses. Players will have control over the settings of these tools, but once they are set, players won’t be able to override them. This means a player may get signed out of their account once they lose the amount they set as a limit.

Stricter Regulatory Measures 

Bitcoin online casinos are already subject to regulations and rules set by government agencies. The process for getting a gambling license is going to get stricter and more complicated. This is partly because of the increased use of cryptocurrencies and partly because there are more players and casinos in general.

The security measures will be held under a higher scrutiny and there’s a chance online casinos will have to renew their license more often. Special attention will be paid to games that rely on blockchain code to guarantee the terms of a bet. These need to be transparent for both the players and regulatory institutions.

Cross-Chain Gambling

Cross-chain gambling refers to gambling that allows players to bet on crypto roulette (for example) using more than one cryptocurrency and more than one crypto platform. The players can seamlessly move their BTC assets from one blockchain platform to another and convert one cryptocurrency to another.

This approach to gambling is already available in some gambling establishments and it will become a norm in the years to come. That will allow the casinos to attract players regardless of which cryptocurrency they are using. Small and niche BTC platforms have their use and following and casinos will be able to tap into it.

Conclusion

The gambling industry needs to be innovative and change with the times so that it can stay relevant. BTC have already changed the industry and provided features useful to both players and gambling establishments. As more players adopt crypto casinos the industry will evolve further.

Online gambling establishments will get more heavily regulated, they will adopt new AR and VR technology, and they’ll allow players to use more cryptocurrencies. The games will be fairer and more transparent with their odds and sports betting will become more popular than before. Both players and BTC casinos will have to quickly adapt to new trends changing the betting industry.

Confused over which crypto regulations are applicable in the UK? Read on to discover all about the Travel Rule, MiCA, and the UK’s proposed regulatory regime.

The release of the UK government’s ‘Future financial services regulatory regime for crypto assets: Response to the consultation and call for evidence’ signifies yet another significant step on the UK’s road toward crypto regulation.

In February 2023, in perhaps the clearest sign to date that the UK government was finally taking the challenges and opportunities of the crypto industry seriously, HM Treasury released a consultation paper on the proposed regulatory regime, which is billed by many as the UK’s answer to MiCA.

The 77-page document featured information on the current regulatory landscape for cryptoassets, definitions of different types of cryptoassets, and geographic scope of cryptoasset activities.  

As well as more general guidelines regarding cryptoasset investment advice and portfolio management, the paper set out a proposed policy approach to bringing cryptoasset activities into the UK regulatory perimeter.

Call for evidence on UK’s proposed crypto regulatory regime.

From February to the end of April 2023, the public and private sector, and those inside and outside Parliament were invited to provide feedback on policies and legislative proposals contained therein. IDnow’s crypto regulatory experts, Rayissa Armata and Jason Tucker-Feltham pored over the consultation paper, and along with 130 other respondents and institutions, provided detailed feedback and analysis. 

In October 2023 HM Treasury published its response to the consultation. In the foreword, Andrew Griffith MP, Economic Secretary to the Treasury said: 

While the vast majority (80%) of respondents were positive about the proposals, 10% had mixed feedback, and 10% were “largely critical” about the proposals. The main objections were from those who fundamentally disagreed with bringing cryptoassets within the financial services’ regulatory perimeter. Objections fell into three camps: crypto should be banned; crypto should treated in line with gambling regulation; crypto should be regulated on assets, not activities.

Feedback on UK’s proposed crypto regulations.

Feedback was collected from a mixture of industry associations, crypto native firms and FinTechs, legal and consulting firms, traditional financial services, and members of public and academia. Twenty themes and topics were identified that need to be addressed:

In light of the above, HM Treasury has pledged it will be setting out ‘modifications’ to the original proposals to provide further clarity on key areas of interest. The government’s aim is for secondary legislation to be laid in 2024, subject to Parliamentary time.

“It is important that the regime’s credibility be seen as robust rather than light touch, so I welcome the decision by the UK government to take the feedback from invested parties very seriously,” said Jason Tucker-Feltham, Head of FinTech and Crypto at IDnow.

What should crypto firms do while they await crypto regulations? 

While firms await rules outlined in the UK’s proposed crypto regulatory regime, crypto firms that wish to operate in the UK must register with the Financial Conduct Authority (FCA), and therefore comply with the Money Laundering, Terrorist Financing, and Transfer of Funds Regulations 2017 (including the FATF guideline amendments). Only firms with appropriate Know Your Customer (KYC) processes, source of funds checks, and proof of funds checks, can be registered to ensure no illicit money is coming through the system.

At the beginning of 2023, out of 300 applications to the FCA, only 41 had become registered. FCA spokesperson, Charles Randell, Chair of the FCA and PSR said that more than 80% of crypto firms that had begun the process to become registered had either withdrawn their applications or been rejected. The most common reasons for not passing were that they did not meet the required AML standards. 

Despite the UK no longer being legally required to follow the rules outlined in the EU’s Fifth Anti-Money Laundering Directive (5AMLD), the UK did decide to transpose the cryptocurrency regulation criteria from 5AMLD and 6AMLD into domestic legislation. Other relevant rules include the Financial Promotions Regime, which is currently under consultation, and the Financial Services and Markets Bill, which includes stablecoin regulation.

What is the UK’s ‘Travel Rule’? 

From September 1, 2023, crypto firms operating in the UK will be required to store, verify, and share all information regarding crypto transfers, as per the ‘Travel Rule’. 

Although well established among traditional financial service providers, the Travel Rule was extended to incorporate crypto activities in the revised Transfer of Funds regulation, which alongside MiCA, was officially officially published in the European Official Journal on June 9, 2023. 

The Financial Action Task Force (FATF), regarded as the global money laundering and terrorist financing watchdog, recently acknowledged the challenges associated with setting adoption and enforcement timelines across different juristictions and regions. Each FATF member state is currently madating travel rule compliance.

In the UK, the Financial Conduct Authority (FCA) has outlined what it expects from firms: 

• Take all reasonable steps and exercise all due diligence to comply with the Travel Rule. 

• Assume responsiblity for complying with the Travel Rule, even when using third-party suppliers. 

• Comply with the Travel Rule when sending or receiving a crypto to a firm in any jurisdiction that has implemented the Travel Rule. 

• Regularly review the implementation status of the Travel Rule in other jurisdictions and adapt business processes as appropriate. 

Putting the KYC into crypto.  

KYC processes are an integral part in ensuring crypto exchanges can protect themselves and their customers from fraud and money laundering, even amid an evolving crypto regulatory landscape. Having these controls in place will protect investors from financial losses and add stability to a notoriously volatile market.  

IDnow’s highly configurable identity verification services for crypto work across multiple regulations, industries and use cases, including crypto. Whether automated or expert-assisted, its online identity-proofing methods have been optimized to meet the strictest security standards and regulatory requirements without compromising on customer conversion or consumer experience.

For more information on what UK’s proposed crypto regulatory regime would look like, watch Jason Tucker-Feltham, Head of Crypto Sales at IDnow attempt to explain it – in 90 seconds or less.

By

Jody Houton
Senior Content Manager at IDnow
Connect with Jody on LinkedIn

Preparing for the known: Operating in a world of crypto regulation.

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