With the recent changes in the online gambling industry, crypto casinos have emerged as a mysterious and intriguing phenomenon. Despite the growing buzz surrounding these digital platforms, many people find themselves grappling with a lack of understanding about what crypto casinos truly entail.
Alanbase, a prominent affiliate program software company, has got into this enigmatic domain, only to discover that the crypto casino industry is shrouded in skepticism and uncertainty. The recent report by Alanbase reveals a startling lack of common understanding about what crypto casinos actually are, with few industry insiders having firsthand experience in these operations.
This knowledge gap has fueled a widespread skeptical attitude, leaving many unable to discuss the topic with confidence.
About Alanbase
Alanbase is a versatile affiliate program software company that has established itself as a leader in the industry, showcasing over 100 clients including prominent names like BetBoom, GloryPartners, and 4rabet. The platform's adaptability allows it to cater to any niche or vertical, making it an ideal solution for businesses looking to launch brand-specific affiliate programs or create multi-vertical CPA networks.
One of Alanbase's key strengths lies in its utility for media buying teams. The software enables precise tracking of targeted actions and in-depth evaluation of various traffic sources, all while offering flexible management options. This makes it an invaluable tool for optimizing marketing strategies and maximizing return on investment.
In compiling their report on crypto in gambling, Alanbase took a thorough approach by consulting several market experts. Each expert provided unique insights, contributing to a comprehensive review of the crypto-gambling industry. The report aimed to address three crucial questions:
What is a Crypto Casino?
A crypto casino is an online gambling platform that primarily or exclusively uses cryptocurrencies for transactions. These digital establishments are often mistaken for traditional casinos that merely accept cryptocurrencies alongside fiat currency. However, true crypto casinos operate entirely on blockchain technology or exclusively use cryptocurrencies for all transactions.
Crypto casinos come in two main varieties: those that accept both cryptocurrencies and traditional currencies and those that deal solely in digital assets. Examples of prominent crypto casinos include Stake and BC Games. These platforms typically support a wide range of cryptocurrencies and display current exchange rates for USDT (Tether).
When it comes to funding accounts, crypto casinos employ two primary models:
- Simple Conversion: This model involves converting the deposited cryptocurrency to a fixed exchange rate at the beginning of each gaming session.
- Double Conversion: In this model, funds are first converted from USDT to cryptocurrency, and then to the casino's in-game currency. The exchange rate is fixed at the start of the gaming session.
Connection Between Classic and Crypto Casinos
Cryptocurrency has become increasingly popular in the gambling industry, offering several advantages for both players and operators. Here's how crypto is transforming classic casinos:
1. Anonymity and Privacy
Cryptocurrency provides a level of anonymity that appeals to players concerned about privacy or those dealing with gambling-related issues. It allows for discreet transactions without the need for explanations to family members or financial institutions.
2. Volatile Nature as an Attraction
The volatile nature of cryptocurrencies can be enticing for players. In 2024, with bullish market trends, players' winnings could potentially increase in value over time. This has led to increased interest in crypto deposits and even casino-specific tokens.
3. Expanded Customer Base
Crypto casinos often have simplified KYC (Know Your Customer) processes, allowing for quicker onboarding and the ability to withdraw small amounts without extensive identification procedures.
4. Larger Deposits
The perception of crypto winnings as “easy money” often leads to larger deposits.
Sergey Litvinov, CEO of a gambling company, explains:
“Therefore, deposits in the crypto are usually higher, much higher. It is also important that for big bets in fiat, you need to overcome a lot of obstacles: if you transfer a large amount to one card to top up your account, the bank, of course, will have questions about such transfers, but in the crypto — push one button and the money is gone.“
5. Improved Payment Conversion
Crypto transactions showcase a 100% conversion rate to payment solutions, compared to the 60-70% typically seen with fiat currencies. This efficiency allows players to deposit any amount without issues.
6. Attractive Affiliate Programs
Galina Bakusheva, an SEO expert in gambling, notes:
“If [classic] casinos usually pay $100 for CPA and 20% for Revshare, then crypto casinos offer us [affiliates] €200-250 and 45-50% for Revshare. Crypto casinos, in fact, do not need to pay taxes and spend money on the maintenance of their product, so it is quite possible to put such figures into their economy.“
Crypto casinos often offer more lucrative terms to affiliates.
These factors combined are driving the integration of cryptocurrencies into classic casino operations, reshaping the landscape of online gambling.
The Profitability of Crypto for Casinos
The volatility of cryptocurrencies presents both opportunities and challenges for casinos. While players might benefit from increasing coin values, casinos could potentially face losses.
For instance, if a player wins $1,000 and the cryptocurrency's value triples during the gaming session, one might wonder if casinos payout based on this increased value.
Santino clarifies this concern:
“No, the rate is fixed at the time of the gaming session, otherwise, it is simply unprofitable for the casino to work with the crypto.“
The Allure of Crypto Casinos
Establishing a crypto casino is relatively straightforward. The market offers a variety of gaming solutions and crypto processing options. The basic requirements include a website featuring games and a back office with CMS and CRM systems.
Galina Bakusheva observes:
“What I've noticed from my experience is that crypto casinos are probably most popular in locations, where there is regulation. For example, it is popular in such countries as the USA, Mexico, Chile, Peru, Canada, Great Britain, Russia, Poland, France, and Australia, because people do not want to lighten their bank accounts and register legally, they try to optimize the tax base. And the resident players of these countries will not be able to receive payments without paying taxes.“
Sergey Litvinov adds:
“There are regions in which there are no payments at all, and the inflation rate is such that it is stupid to keep assets in the national currency. In such regions: Africa, some countries of LatAm, and the Middle East, in Turkey — the population is much more active in mastering the crypto and transferring savings into it, simply because it is more reliable. Crypto markets are actively opening up in these regions, and there is enough audience for everyone here.“
Bakusheva further notes:
“In addition, payment systems often refuse to work with casinos. Thus, the products are simply forced to go into untraceable crypto.“
Litvinov concurs:
“The ability to accept payments is one of the main problems of the casino. Whoever finds the payment card will dominate the region and pay for their traffic. In new products, the finance department is often larger than the development department of the casino itself, because you have to constantly go through the bills in the region. They are banished, fall off, and many cannot stand it and close. That's partly why casinos are trying to move into the crypto.“
The success of Stake, launched in 2017, inspired many operators. However, Litvinov points out:
“But Stake's success story was due to media partners with a huge audience.”
He also notes that even Stake eventually incorporated traditional fiat currency due to the lack of predictable and scalable traffic sources in crypto.
Litvinov concludes:
“Therefore, I often come across a story in the market that crypto casinos are as easy to launch as they are to close.“
The Slow Adoption of Crypto in Casinos: Challenges and Hesitations
Despite the potential benefits, many casinos are hesitant to fully embrace cryptocurrency. This reluctance stems from several significant challenges:
1. Limited Player Base
Finding players for crypto casinos is a major hurdle.
Sergey Litvinov explains,
“It must be understood that cryptocurrency penetrates the population very slowly. Hand on heart, we can talk about a maximum of 1% of the world's population who actively use the crypto for payments.“
Traditional casinos target a broad audience, often without demographic distinctions. However, reaching the right crypto audience is more complex.
Litvinov adds,
“It turns out to be a dissonance: the most popular mechanics in gambling are regular slots, which attracts a non-thinking audience. And the main purveyors of crypto are geeks and crypto investors.“
Marketing channels for crypto casinos are limited, primarily to streamers and social media platforms like Telegram. This limitation leads to challenges in advertising optimization and increased competition for a small audience pool.
2. Difficulties in Attracting Affiliates
Crypto casinos often struggle to build trust with affiliates.
Galina Bakusheva shares her perspective:
“If I see that the product works exclusively with crypto without any fiat options, I have questions. This suggests that people [casino owners] do not want to deal with the state and do not want to legalize their cash flows. They are not responsible for anything, so working with such casinos is a job you take at your own risk.“
She recounts a negative experience:
“We had a negative case: such a product came to us. We tested, and worked on them, got nothing when we heard that all our traffic was ‘fraud'. And we didn't work with them anymore.“
Sergey Litvinov offers insight into the perception of crypto-only casinos:
“I would say that the lack of the possibility of fiat replenishment of the account indirectly simply means that the company is small. Compare: it costs $300-500 000 to open a fiat wallet, and with a crypto wallet, you can keep within $ 100,000. At least because you don't need so many employees of the finance department to search for payments. I would say that trust rather gives rise to the brand and appearance of the casino.“
Bakusheva agrees, emphasizing the importance of reputation:
“Yes, the main factor for us, as webmasters, in making a decision to work with a crypto casino would be brand awareness.“
These challenges highlight why many casinos are cautious about fully transitioning to crypto operations, despite the potential advantages.
End Note
As we've explored the world of crypto casinos, it's clear that this emerging sector offers both exciting opportunities and significant challenges. While the allure of cryptocurrency in gambling is undeniable, operators must be prepared to deal with some of the downfalls. These include:
- Finding the right audience
- Operating in niche markets
- Investing heavily in brand awareness is just one of the hurdles to overcome.
However, for those willing to try out this industry, the potential rewards could be substantial. Companies like Alanbase are paving the way with specialized software solutions, offering turnkey services that streamline the process of managing affiliate programs, offers, statistics, and payouts.
To explore Alanbase's features firsthand, you can schedule a demo call with a manager. After the demonstration, you'll receive complimentary access to the full suite of services for a 14-day trial period, allowing you to experience all the platform's capabilities.
