According to a number of analysts, blockchain technology offers the potential to disrupt a range of industries: banking, logistics, ticketing, intellectual property management … the list appears endless.
However, for some, it is gambling that leads the field for taking blockchain tech with a wide adoption use-case to the masses.
“Gambling is a perfect fit for blockchain and vice-versa,” claims Kelvin Coelho of meVu, a Canadian-based blockchain gambling start-up. “It offers transparency – and therefore trust – on both inputs and outputs, and because the technology doubles up as a de-facto international payments system, it democratizes gambling as an activity – the technology lowers the bar significantly for anyone who wants to offer their own markets.”
meVu’s plans are to leverage blockchain tech in such a way that will allow its technology to be used as a white-label, blackbox gambling markets platform. That will allow anyone to build their own gambling brand without being overly burdened with the mechanics of managing betting markets. It is new territory for one of humanity’s oldest industries.
The technology also allows for immediate pay-outs over which the market maker exercises no control whilst reducing the traditional costs associated with betting.
Cut waiting times of traditional sports books while reducing fees from 10 percent to as low as 2 percent. MeVu is never processed by a bank or any 3rd party institution.#meVu #letsmeVubet #bet #gaming #gambling #feereduction pic.twitter.com/cygXdK9t9r
— mevu (@mevu_bet) February 25, 2019
Legal Grey Area
Traditional bookmakers require licences, however, and need to meet with certain statutory capital requirements to ensure that they are financially capable of fulfilling their engagements with customers – a new bookmaker entering into the arena typically needs about $300,000 to begin operations, according to Coelho.
With blockchain technology, on the other hand, the market maker does not get to offer a market unless he commits the required capital to each specific bet. As such, market makers can now enter the industry with lower capital outlay as gambling increasingly transitions to this so-called peer-to-peer (P2P) model.
Current legislation – both in the UK and elsewhere – is failing to anticipate the legal uncertainty raised by P2P gambling. And that means that difficulties lie ahead as to whether current regulatory frameworks for gambling are adequate for the new industry of blockchain gambling which takes statutory authorities into unmapped territory and challenges current definitions of what actually constitutes regulated gambling activity.
However, even with opposition from government and traditional bookmakers likely to emerge in the near future, blockchain tech’s inherent resistance to outside interference – along with its ability to offer anonymity – may mean that those challenges will be redundant, adding further headache for those who want to see tighter regulation in the industry.