Internet Gaming may Open Crypto Doors

With bitcoin prices faltering this year, it’s difficult for less experienced investors to think about issues such as crypto usage cases.

Still, the expansion of the usage case, including adding more industries and venues that will accept crypto as a form of payment, is integral to the long-term crypto investment thesis. Additionally, the expanded use case can provide support for crypto-correlated stocks and exchange traded funds, such as the VanEck Digital Transformation ETF (DAPP C+).

One frontier ripe with potential for multiple DAPP components is internet gaming, also known as iGaming or online casinos. While iGaming is a new concept in the U.S. and is currently permitted in just a handful of states, it’s highly popular in an array of markets outside the U.S., including plenty in which crypto adoption is high.

“Applying blockchain transactions in iGaming significantly reduces payment processing costs and could potentially enhance operators’ earnings before interest, taxes, depreciation and amortization (EBITDA) margins by as much as 8ppts,” wrote Roth Capital analyst Edward Engel. “Over $3bn in gross gaming revenue (~5% of global iGaming GGR) is already wagered using crypto, and the regulatory landscape is improving both globally and in the U.S. Meanwhile, rapid growth in gray markets is fostering innovative solutions from major B2B suppliers, and we see this accelerating adoption in white markets.”

In the U.S., states that permit iGaming and online sports betting currently do not allow crypto as a method of funding accounts. That could change over time, and some gaming companies are open to the idea. For example, DraftKings (NASDAQ:DKNG) CEO Jason Robins said last year that his company would like to accept crypto as a form of payment, but state regulators stand in the way.

In the countries that allow online casino operators to accept crypto, there are significant advantages, underscoring a potentially compelling intersection between crypto and wagering.

“Advantages of accepting crypto deposits rather than traditional payment channels include 1) significantly lower payment processing costs, 2) transaction acceptance rates of 99.9%+, 3) instant withdrawals, and 4) negligible chargebacks. Given the advantages blockchain has over traditional payment channels, crypto deposits are more efficient and secure as they reduce reliance on third-parties while facilitating ‘trustless’ transaction,” added Engel.

Currently, the bulk internet wagering permitted in crypto occurs in the form of bitcoin or ether — the largest digital currencies. Should that remain the case, it could have long-term positive implications for DAPP components with links to those cryptocurrencies.

For more news, information, and strategy, visit the Crypto Channel.

https://etfdb.com/crypto-channel/internet-gaming-may-open-crypto-doors/

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