International Study Pulls Back the Curtain on Cryptocurrency Gambling Habits

An academic article published in October 2020 has provided a revolutionary breakthrough for research into the gambling habits of those who play casino games on decentralized crypto platforms.

Approved by the Physical Sciences and Ethics Committee of the University of York, the study by O.J Scholten, D. Zendle, and J.A. Walker may provide the perfect platform for the gambling market and its regulators to better understand the gambling trends of this unique player base. Once refined, the intention is that they might then be able to use the model to combat problem gaming and player vulnerability more effectively in the future.

The Ideal Research Setting

For the scope of the study, the researchers set specific and measurable parameters. This would ensure a high degree of accuracy and provide a simpler test case, considering that a study of this nature has never been undertaken before.

The project was confined to 2,232,741 transactions from 24,234 unique blockchain addresses connected to only three decentralized casino sites, where all the transactions were made in Ether currency atop the Ethereum blockchain.

The Ethereum blockchain was an obvious choice for this experiment, as it is the "oldest and most popular network by market capitalization of cryptocurrency networks which explicitly supports smart contracts". This means that a detailed agreement for trade between the casino and gambler is provided for each transaction and hardwired into the code.

A decentralised blockchain is a public ledger where information about all the transactions made on it is readily available to the public, providing specific details about users that cannot be accessed in the centralised environments of real money casinos. This means that the statistics can be more finely tuned in the crypto sphere.

 High Rollers Love Crypto Casinos

The research report provides valuable insights into the nature of decentralised services and how they contrast with mainstream gambling.

For instance, it was clear to see that the average crypto casino player spends less than their counterpart does at a regular online casino. Gamblers using fiat currencies would spend approximately $110 per day more, split over 6 additional wagers.

However, when comparing the wagering habits of high rollers, the roles were reversed. The study showed they would spend more than $100,000 over a 35-day period ($2,857 per day) on 644 bets (18.4 bets per day). This has the Bitcoin and crypto big spenders outdoing their fiat currency counterparts by as much as 20x.

 The Significance of the Results

To the layperson, the above statistics may not mean much, but regulators will know exactly what to do with information like this. For a start, the blockchain clearly delineates between non-risk and high-risk players.

The study highlights the connection between heavy involvement and problem gambling:

“Heavy involvement by any of the behavioural measures used here may be detrimental to the individuals affected. For example, those most heavily involved in terms of the duration of their play will naturally have less time for other commitments, or those with large net losses may face financial repercussions should their income not support such expenditure.”

That means that casinos can target 5% of their customers with extra interventions aimed at good responsible gambling management. Having a more accurate understanding of the customer base will do wonders for how effective Gambling Responsibility initiatives can be in the future.

 A Journey of a Thousand Miles

There is still a great deal of work to be done in this field to produce a well-rounded measure in which problem gamblers can be reached. For a start, blockchain transactions are tied to a wallet address and not an individual. There is, therefore, no way of knowing who the heavy spenders are, or what demographic they represent. This sort of information is pivotal to a practical roll-out of safer gambling protocols.

For this information to gain traction in the fight for social responsibility, a few things would have to be put in place still:

• Casino customers would have to register themselves and provide at least some form of contact information that can be linked to the data mined from the blockchain on the casino’s end. This way, wallet IDs could be linked to people and people could receive the help they might need. This single action would be to fly in the face of the principles of anonymity which are upheld in purist crypto circles.
• AI and machine learning technology would need to be implemented to mine the data and recognise these researched patterns. For a casino to conduct a study like this on its players every month would simply not be feasible without AI.

The upside here is that there is a technology with the potential to solve the problems regulators have been tussling with for years. The challenge will be finding a way to create balanced regulations which improve the lives of at-risk players without compromising the qualities that make cryptocurrency the positive disruptive force that it is.