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  • 2 weeks ago
Categories: News

How to Avoid Gambling Scam using Blockchain

Online gambling holds lots of risks related to the fairness of the process and winning chances. Normally, there’s the advantage called the house edge that prevents customers from earning more than the casino itself. Every game has a specific return to player (RTP) index which normally varies from 90% to 99% (that means that 1-10% is the house edge).

But apart from the fact that it’s hard to beat the casino, you can face scam projects. Some websites may hide actual RTP or change rules unexpectedly, some may even not have any licence for operation and fool customers by getting their deposits and never paying back their winnings.

How to recognize fraudsters and scammers in online gambling? With the invention of blockchain, the situation a bit changed for the better. Let’s find out in what ways this technology can help avoid scams.

What is a gambling scam?

Basically, a scam is any strategy focused on fooling customers. Croupiers in land-based could replace cards or chips or even change rules, also, there could be rigged machines programmed not to let anybody win. Today, the risk is much higher on the Internet: online platforms have to get licenses but it’s way harder to check their lawfulness.

Choose operators that work with trusted software companies – on MicroYes.co.uk, experts and fans of the industry strongly recommend reading reviews on every feature: payment methods, promotions, games selection, etc. Unfair websites use various tools to earn more money:

  • Modified RNG (random number generators). For example, developers can lower chances for valuable symbols to appear in slots.

  • Hidden RTP. Officially, this feature must be visible to players. The trick is that casino owners can show a number which doesn’t correspond to reality.

  • Extra fees. Usually, terms and conditions list all possible fees but scammers may hide some information. There are could be insane fees (up to 25%) for withdrawing.

  • Freezing accounts. Some websites can block users under false pretenses before they cash out their winnings.

  • Closing the website. The most impudent scammers create one-day platforms, get users’ wagers, and simply disappear. These websites may look like a copy of famous and trustworthy ones. The phishing scheme of sending emails with fake links that are similar to big brands is extremely popular.

Since there are so many incidents, regulatory organizations are trying to improve the state of things: for example, the UK-based Gambling Commission asks to report scam activities to Action Fraud.

How blockchain may help?

Blockchain is a decentralized network protected by cryptography algorithms that stores data on multiple computers, visible to all participants. Blockchain is a great solution that eliminates intermediaries in data or money transfers and brings high-level transparency.

Let’s look at how powerful blockchain can be when it comes to gambling.

Unchangeable records

Any data recorded in the chain can’t be forfeited, copied, or deleted. Casinos which send the information about RNG and RTP to blockchain can’t change the numbers. It works the same with rules and conditions. Further, blockchain-based casinos can’t impose extra fees behind users’ back.

No sensitive data involved

On websites that accept payments with digital currencies (that are powered by blockchain), the only information a gambler has to provide is the public addresses of a crypto wallet. For the reason that casinos don’t deal with personal data, there’s nothing to steal for hackers and scammers. The private key for accessing funds is not revealed and remains visible only to its owner.

Smart contracts

One of the most practical innovations related to blockchain is smart contracts – deals with predefined conditions controlled by the network’s participants. Smart contracts used for payouts in casinos leave no chance for money transfers manipulation.

Use cases

Decentralized gambling platforms that were created with blockchain implementation remain the minority. But this is the exact way to overcome security risks and ensure fair gaming experience. Successful cases of the following projects should inspire more of their kind to appear.

  • vDice. One of the oldest gambling systems based on smart contracts. It supports direct playing without in-system accounts.

  • Edgeless. This licensed blockchain casino has a zero house edge. It’s powered by Ethereum’s smart contracts and allows wagering with its native token – EDG.

  • FunFair. The platform for gamblers and developers feature both solutions for decentralized casinos and instant-play blockchain-based games.

  • SSP8DE. Another platform for casino developers which allows creating apps with a zero house edge, no fees, and a transparent RNG.

Benefits of blockchain

Blockchain is a useful instrument to fight gambling scam. It can protect both casinos and players thanks to irreversible transactions and transparency. The more the gaming community knows about this technology, the more chances to replace traditional casinos blockchain-based ones have. The way to expand blockchain integration into the industry may start from Bitcoin payments becoming a necessity. Realizing the improvement it can bring, gambling websites will gain more trust and overcome their vulnerabilities to scamming strategies.

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