In this century, gambling has become more thoroughly legitimized. It has gotten unleashed, no longer confined to specific physical spots that acted as its gathering grounds for games of chance and sports betting connoisseurs. Twenty years ago, only nine US states allowed commercial gaming establishments. Today, that number is over twenty. Moreover, over the past decade, internet gambling sites have experienced a boom thanks to increased internet penetration and advancements in live dealer technology.
Now, the online gambling industry, a rapidly growing sector that raked in $58.2 billion in revenues in 2021, is exploring a new approach to remote gaming, metaverse casinos. Everyone that is a tad tech-savvy has likely heard the phrase NFT in the past couple of years, an acronym for non-fungible token. That is an unreproducible digital asset that is more or less the basis for most virtual shared spaces, now referred to as metaverses. In this article, we go into how metaverse gambling works and if it has a viable future in the interactive gaming landscape.
How Online Casinos Use NFTs and Blockchain Technology?
Online casinos began utilizing blockchain technology around 2012 when the first sets of crypto dice sites hit the Web. At that time, these platforms did not get regulated by any licensing bodies and provided their services on a good-faith basis. They hosted only provably fair gambling options, accepted Bitcoin, and featured few promos. Following the decision of Curacao-based regulator Antillephone to oversee and approve these hubs, that move opened the doors for them to begin supplying modern slots and streaming table games. It is not unusual now for one of these crypto casinos to have a catalog of thousands of titles and boost unique promos like mystery chests and chat rain.
NFTs entered the gambling fray with the emergence of metaverses, vast virtual maps that users can traverse via avatars that allow them to interact and transact with others. These games/worlds let those who are a part of them to participate in their usually Ethereum-powered economies. They have a fungible token that assumes the role of legal tender, money, and non-fungible ones, which are unique assets, such as clothing, pieces of land, vehicles, structures, and more.
Inside these NFT-driven metaverses, many individuals and companies have decided to open and operate virtual gambling venues.
The State of Gambling in the Metaverse
Currently, only a few metaverses have casinos. The most famous virtual space of all, Decentraland, has several, including the renowned ICE Poker property, a card game where players complete daily challenges against each other to earn tokens. It launched in 2021, and its patrons must buy or get delegated a wearable NFT to start their betting journey in this virtual venue. They receive chips daily based on the number of NFTs they own, earning XPs and ICE tokens for fulfilling different-level tasks. Those that rank high on the daily leaderboard get multipliers that affect their reward accumulation, with the top 40% of users snagging x1 to x2 multipliers.
The Tominoya Casino is another popular gaming locale in Decentraland, supporting only MANA gambling. That is Decentraland’s native token, this world’s primary currency. The Tominoya Casino is a Japanese-themed facility that covers two floors, each with three wings, hosting roulette, blackjack, poker games, and slot action.
The Sandbox is another Ethereum-fueled metaverse whose users are dipping their toes in gambling entrepreneurship. And many believe that Somnium Space residents will try the same soon.
Do Web3 and NFT Gambling Have a Future?
For the uninformed, Web3 is a term that refers to the metaverse phenomenon. It is a phrase used to define the new iteration of the internet that incorporates concepts such as decentralization, token-based economics, and blockchain technologies.
However, if one finds themselves residing in a country with strict gambling laws, they should not expect that they will be able to turn their metaverse winnings into cash any time soon. Moreover, such individuals should not expect to join offshore virtual casinos and rake in massive untaxable gaming profits. When someone wishes to convert their digital coins into fiat currency, they must report the source of these funds. When that conversion happens, and this money lands in a person's bank account, they must classify them. If they claim they are income earned through gambling. Then taxes must get paid on these funds. That is why Decentraland’s ICE Poker quickly navigated away from a legitime gambling platform to a play-to-earn system.
So, the future of Web3 and NFT gambling chiefly relies on gambling and crypto regulations. Laws that are unpredictably about to unfold in the years to come.
State Regulators & NFT Casinos
No one regulates NFT casinos. Furthermore, only a few international interactive gaming regulators license and monitor regular crypto casinos. For instance, the Malta Gaming Authority, Europe’s top continent-wide regulatory body, has struggled with the notion of allowing virtual money on their licensed platforms for years. That is something that mainly the four Curacao master license holders have popularized over the past few years.
Britain’s UKGC made cryptos a fiat money equivalent in 2016, but not many British-based operators have taken advantage of this option. Moreover, in the US, no state has cryptocurrency regulation, and no state gaming regulators allow Bitcoin or any altcoin to get used as a stake on their licensed sites. Note that US state regulatory bodies do not oversee or approve metaverse casinos.
NFT Non GamStop Casinos
GamStop is the UKGC’s mandatory self-exclusion scheme. It is a database that every UKGC gaming platform must use. And when one of their players activates a self-imposed ban through this system, he is unable to sign-up with any other British operator until his designated self-exclusion period elapses.
A non-GamStop casino is a term for offshore sites that accept UK players. These do not take part in this scheme. Hence, NFT non GamStop hubs are dominantly crypto ones that allow Brits to join their ranks.
Virtual casinos are an exciting new frontier, as token-driven gambling fun is something novel and holds loads of potential. That said, the path to success for this gaming genre remains unclear, as its regulatory waters have not yet gotten defined, and there is loads of uncertainty regarding its growth perspectives.