Why Online Gambling Is Ripe For Disruption

01/06/2018 11:24 am ET

Pillars of the entertainment industry cannot hold a candle to the new goliath: gaming. The sales of digital console, PC and mobile games dwarf the combined revenue of the more traditional forms of entertainment such as music or video.

It follows that the meteoric rise has shaped another major industry: gambling. Once a pastime taking place exclusively at tables or at brightly-lit slot machines in casinos, it seems that the digital realm is an ideal fit for games of chance, with a market in the UK generating £4.7 billion (a 10% rise in the past year).

Online Gambling Is Ripe For Disruption

Gambling online does come with its own set of problems, however. There’s the virtual equivalent of a loaded die to deal with, for instance − how does the user know the odds they’re receiving are as advertised by the site? How do they trust that their winnings will be paid out, and in a timely manner? How do they ensure their financial anonymity?

Most of these issues follow a pattern: the user needs to trust the house.

Luckily, it’s 2017, and blockchain technology is quickly turning the idea of blind faith obsolete. A blockchain is best described as a ledger of transactions, visible to anyone and shared across a network. The result of having such a public ledger eradicates the need to trust a single entity − you are effectively trusting the rest of the network. In this way, transactions are transparent.

The Turing-complete Ethereum blockchain takes the idea a step further by giving users the ability to create and execute smart contracts − so, for example, person A and person B could create a contract to bet on the outcome of a tennis match. They would both place funds into escrow, and the contract would pay these out to the winner after verifying the outcome with an agreed-upon source. Again, due to the open nature of the blockchain, this contract is enforced collectively by the network and is viewable to anyone.

It’s not hard to see what this could do for the gambling industry. Whether sports betting, card games or slot machines, users could participate, knowing that the terms of the smart contract cannot be altered and that payout is conducted automatically. There is no third-party to trust.

JoyToken has identified the potential for blockchain deployment in online gambling, and aims to be the first platform of its kind − fostering the creation and innovation of games from small, independent developers, while integrating the use of decentralised autonomous agents to offer a transparent gaming service.

The ecosystem revolves around the use of a cryptocurrency built on top of the Ethereum blockchain, the JoyToken. The token is used by players, which guarantees them greater anonymity (no ties to any bank accounts) and rapid payouts − instead of passing through a middleman (the casino), players place their JoyTokens in a given game’s smart contract directly, greatly expediting the process.

The JoyToken works in conjunction with the JoyToken online casino, where developers can integrate and test their games and operate in the knowledge that the site is licensed in the UK, Curacao and Malta. If a player loses a game, the staked JoyTokens are distributed to the casino and the developer, but beyond this, the funds are never under control of a party other than the player. This is the real innovation. A complete 180 from the legacy system that empowers the player. It is impossible to rig a system that is plainly auditable. Through blockchain, JoyToken may well cause the decay of an obscure system by rendering it completely transparent.

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