The Role Of Proprietary Tokens In Online Casinos

Online casinos have been accepting cryptocurrencies and NFTs for a while now, meaning the gambling world is already familiar with tokenomics. However, what if online casinos did more than accept crypto assets and started creating their own? It’s one of the many avenues opened by the tokenization of gambling platforms, and it has several ramifications. 

Here’s everything players need to know about proprietary tokens and how they change the game in the online casino industry.

Defining the Concept

Decentralization is a key feature in the crypto market. While there are countless Bitcoin institutional investors, none of them change how they work or manipulate their value. Definitely, it’s not the case of proprietary tokens, which single providers create to work as a payment method within their ecosystems. It may not sound very exciting for investors, but it’s very much so for players, as proprietary tokens have been transforming online gambling. 

For those unfamiliar with tokenomics (the fusion of tokens and economics), it’s important to think of proprietary tokens as in-game currency for buying new items and unlocking special features. Likewise, players can earn those tokens (digital coins or NFTs) by completing tasks and missions or buying them for real-world money. 

However, there’s a crucial difference: unlike fake coins from silly games, Bitcoin or Ethereum can exchange a bitcasino token, for instance. So, they do have real-life value, adding play-to-earn features to online casino games and making them more engaging. The same logic applies to non-fungible tokens. Some platforms offer rewards in NFTs, which can be later traded for money, cryptos, or give access to special offers.

Why Online Casinos Love Them

Considering that proprietary tokens aren’t real money (in theory), online casinos can create reward schemes based on them without spending precious resources. At the same time, players who have earned those tokens via rewards and bonuses aren’t spending any money when they use them for new bets. Indeed, it’s a win-win situation. 

Applying tokenomics to the online casino world attracts new audiences, such as crypto enthusiasts looking for new ways to use their assets. More importantly, it makes online casinos much more engaging for players, as completing tasks and missions can result in real-life gains. In some cases, it’s even possible to earn interest from such assets with promotions where players agree to save a certain amount of tokens for specific periods, creating passive income. 

Additionally, unlike fake in-game currency, proprietary tokens provide interoperability. It means they can be used outside their original platform, including other online casinos. For the first time, players can use the same bankroll on different websites. It’s a huge advantage over traditional payment methods, where bankroll portability isn’t possible. 

Accessible Technology

One of the best things about online casinos is that players don’t need the latest gaming console to enjoy them. They run on almost any smartphone or mobile device, provided an internet connection is available. 

The same goes for digital assets like proprietary tokens. In fact, they allow for seamless in-game payments and other transactions on most devices. Nearly 60% of the global population owns at least one smartphone, meaning any mobile-based solution has huge market potential.  

Unlucky Features

Despite their innovative potential and manifold advantages for players, adopting proprietary tokens isn’t all fun and games for casino providers. It can be quite costly to set up a solid tokenomics structure. Providers willing to operate with crypto assets also must invest heavily in blockchain technology, cloud infrastructure, and server instances.

They must also comply with AML and KYC protocols. Not all jurisdictions allow this payment method. In Brazil, players can only fund their accounts with debit cards or direct bank transfers, and traditional credit cards are not allowed. Providers can miss out on huge markets and risk expensive lawsuits by miscalculating compliance steps.  

True, proprietary tokens aren’t cryptocurrencies, but it doesn’t mean they’re immune to market volatility. After all, if they can be exchanged by Bitcoin and Ethereum, abrupt fluctuations in the crypto market can also affect the value of Bitcasino tokens, for instance. Such fluctuations may scare away more risk-averse players, or they may simply lose their interest in them if market downturns render them worthless.

The combination of online casinos and tokenomics can lower the access barrier to the crypto world by making it easy and engaging. However, it can put off players who are unfamiliar or skeptical regarding cryptos. Finally, providers who want to tokenize their platforms must reinforce their cybersecurity systems to prevent fraud and theft.    

The Future of Tokenomics in Online Gambling

Challenges aside, tokenomics seems to be the future of online casinos. While it can be tricky and risky for online casinos to adopt tokenomics, recently developed simulation tools help providers build and test models virtually before adopting them. Ensuring fair MEV (Maximal Extractable Value) for miners is also becoming easier, avoiding congestion and unfair payments.

Blockchain technology is constantly changing, and it’ll likely embed tokenomics features in its architecture, from which new buy and burn models can emerge. It means that creating new tokens will become less of a challenge for online casinos, opening space for even more innovative features. 

More than supporting existing cryptos, platforms can create exclusive ecosystems based on their tokens, thus building brand loyalty and strengthening communities. Meanwhile, players can use their tokenized assets on multiple online casinos or exchange them for rewards on partner marketplaces. Indeed, the future looks bright for gamblers and providers.