Ron Mendelson is the Director of Costa-Rica based International Business & Corporate Services consultancy firm, Fast Offshore. With over 24 years of real-world experience in iGaming Licensing and Payments, Regulatory Compliance, Tax-Efficient Corporate Structuring, Incubator and other Hedge Fund Licenses, Blockchain and Cryptocurrency related services, he advises a number of international clients on their business needs in the Americas, Europe, and beyond.
Crypto and virtual currencies are everywhere. They are no longer just something used on the dark web or by enthusiasts of technology. These kinds of digital payments are finding their way into everyday life and are well on their way to mainstream adoption. Bitcoin ATMs, crypto payment processors, crypto wallets, and even buying your groceries with non-fiat alternatives, this is the future of transactions.
Another sector that is growing exponentially is the online gambling sector. Forecasts suggest that we can expect a steady increase in the number of new users for the foreseeable future. But these new users want more than just a regular casino with regular payment methods. As consumers thirst for technology and innovation increases, so do their demands from companies like yours.
Cryptocurrency payments on online gambling sites or so-called Bitcoin casinos are becoming more popular and consumers are increasingly wanting to pay and withdraw in crypto. In this article, we will take a look at the benefits of cryptocurrency payments in the casino context and some of the best jurisdictions for licensing crypto casinos.
The benefits of offering crypto payments
There are several benefits to integrating cryptocurrency payments into your online casino or gambling platform. Whether you decide to offer both cryptocurrency and fiat, or solely cryptocurrency, here are just a few examples. .
Providing your customers with multiple ways to pay is not only good customer service but it can increase the number of clients you have, and your retention rate. Not everyone has a bank account and if they do, not everyone wants to use it online for online gambling. Providing cryptocurrency payment integration allows your players to decide how they pay and to choose the option that is most suitable for them.
There may be instances where players don’t want payments and withdrawals from online gambling sites to show up on their bank statements. The level of privacy and anonymity that cryptocurrency payments give is very attractive to users and can increase their loyalty as well as time spent on your site.
Bank transfers, card transfers, and other fiat payment processors can levy high fees against the user and the merchant. Cryptocurrency payments offer a lower-cost alternative for all involved.
Depending on the processor or method you’re using, it can take hours or days to make transfers or withdraw funds from an online casino site. Cryptocurrency payments offer an almost instant transaction which saves time and keeps your customers happy.
Cryptocurrency transactions, once executed, cannot be edited, changed, revoked, or tampered with in any way. This provides both the player and the merchant with an added layer of security and assurance. It cuts the risk of fraud and can also be useful in disputes overpayments or payouts.
Cryptocurrencies are borderless and have the same value regardless of what country the holder is in. For those operating an international gaming platform, this is incredibly useful. Furthermore, transactions can be made quickly and in a low-cost manner, transcending borders, nations and continents.
An issue with payments in the online gambling sector is that typically, there are high chargeback rates. A high rate can result in the termination of service with a payment processor or banking institution. With cryptocurrency, the transactions are immutable, meaning they cannot be reversed or charged back. Of course, when necessary, refunds can be given but these must be done directly with the platform.
Regulating cryptocurrency payments
There are several jurisdictions where you can integrate cryptocurrency payments with your existing online gambling license. Or, if you are a startup or looking to move to another jurisdiction, some are considered crypto-friendly and support your use of virtual currency.
The most highly recommended jurisdiction is Curacao. Acquiring a license there is cost-effective, efficient, and not overly complex. Once you have it in hand, you can provide all kinds of casino games to your clients as well as offer a range of payment methods, including cryptocurrency.
Another jurisdiction worth considering is Kahnawake. This First Nations reserve in Canada is renowned for its good reputation and reasonable online gambling license application process. While it costs more and takes longer than the Curacao license, it does carry a bit more weight in terms of prestige. They also welcome cryptocurrency casinos with no additional requirement for licensing or permissions.
If you are an established casino or have a bigger budget, a Malta online gambling license also provides for payments to be made in cryptocurrency. This is a recent development and the Malta Gaming Authority is still in the early stages of allowing such payments but it is possible to apply. The Malta gaming license is the gold standard in the industry and the government has a very positive and encouraging opinion on cryptocurrency and blockchain entrepreneurship.
The last word
Whether you are a startup looking to open a Bitcoin casino or one that accepts both fiat and crypto, or an established operator who wants to incorporate crypto payments into operations, Fast Offshore can help. We can advise on where and how to get licensed for a crypto casino, as well as how to integrate such payments legally. Furthermore, through our network of trusted partners, we can connect you with third-party payment processors for both fiat and crypto and negotiate better rates.
If you are not offering a variety of cryptocurrency payments or it’s not in your plan for the next 12 months, be aware that you are putting yourself at a significant disadvantage and potentially alienating a large section of your client base.