Outlining the Crypto Usage in Online Casino

Security, speed, and practicality are the key elements in choosing a payment method, so how does cryptocurrencies fill those requirements?

Well dressed people playing poker in a bitcoin casino, art generated by Midjourney.

Based on KTO's research, the online gaming payment landscape is predominantly dominated by traditional methods

In Brazil, payments are commonly made by PIX and Bank Cards. However, KTO's findings also shed light on the growing niche of cryptocurrencies, which, though preferred by only 8% of users, signify an emerging trend in the casino sector.

This insight from KTO underscores the gradual yet significant integration of digital currencies into the gambling industry, highlighting an innovative shift alongside PIX and other ascending payment options.

An Overview of the Crypto Usage in Online Casino

With Ethereum at its highest value a month ago, the crypto scenario has undergone great changes and improvements that benefit payments and digital wallets. As revealed in a survey conducted by Statista, the usage of cryptocurrencies as a payment method worldwide according to central banks is either trivial or unknown.

ENV research indicates that cryptocurrencies are slowly gaining traction in the Brazilian online gaming market, with an 8% adoption rate.

This emerging trend, documented by KTO, points to a growing curiosity and acceptance of digital currencies within the iGaming and online casino industry, suggesting a potential shift in the traditional payment ecosystem.

Although PIX is a popular and practical option in Brazil, the emerging trend of cryptocurrency as a payment method regulated by The Central Bank of Brazil (BCB) is growing stronger now that the BCB aims to launch its own digital currency to make crypto less volatile.

According to a study by Stilt, 94% of crypto buyers are Gen Z and Millenials, with an age range between 18-40. The comparison between crypto buyers and the target audience of online casinos (18-35), coupled with digital currencies easiness brings a natural synergy to raise crypto payments adoption. It’s a competitive advantage for platforms as well since bettors don’t need to convert or exchange their savings in order to play, therefore attracting a broader audience.

As crypto was regulated in Brazil only in 2022 by the former president Jair Bolsonaro, it’s still right to say that there is much room for improvement and tendencies to grow regarding payments and cryptocurrency transactions in the iGaming sector.

Trust and Security in Online Transactions in iGaming

While traditional payment methods like PIX and bank cards remain prevalent in Brazil, the rise of cryptocurrencies presents a compelling alternative due to their enhanced security, speed, inclusivity, and growing acceptance by traders. As such, they are sure to become an increasingly important component of the Brazilian payment landscape.

To improve the perception of security and user-friendliness of cryptocurrencies in the iGaming sector and other sectors such as ecommerce, several strategic initiatives could be undertaken:

  1. Design intuitive and easy-to-navigate platforms for cryptocurrency transactions, reducing complexity and making it more accessible to users unfamiliar with digital currencies.
  2. Implement robust security protocols like end-to-end encryption, multi-factor authentication, and regular audits to reinforce the safety of cryptocurrency transactions.
  3. Develop and promote educational materials that explain the benefits and functionalities of cryptocurrencies, aiming to demystify digital currencies and highlight their security features.
  4. Work closely with financial regulators to ensure that cryptocurrency operations meet legal standards, thus boosting their credibility and perceived security among users.

At the same time, on March 19, the European Union passed Anti-Money Laundering Regulation (AMLR) laws to restrict large and anonymous cash payments, effective in 2027. The regulations aim to combat illegal activities, setting limits of 10,000 euros for cash payments and 3,000 euros for anonymous ones.

The AMLR laws passed by the EU restricting cash payments may drive more people towards using cryptocurrencies for transactions, boosting their adoption.The absence of restrictions on privative crypto wallets indicates a balanced approach to regulation, potentially fostering innovation in the crypto space. Overall, these laws could lead to increased legitimacy and acceptance of cryptocurrencies as a payment method.

The demand for safer payment methods is driving the expansion of cryptocurrency usage. As a result, the focus on safety and responsibility within online casinos presents a promising opportunity for the increased adoption of cryptocurrencies within the iGaming industry.