Deloitte’s 13th annual Tech Trends report explores seven trends and dozens of new technologies that are shaping both our physical and digital experiences. Deloitte Hungary’s Gambling Advisory team will explore how some of the most prevalent technologies are utilized by the gambling sector and how they transform the players’ experience. This article will showcase how Blockchain and Beacon technologies affect the industry.
The history of gambling is just as old as mankind itself: no matter how far we go back in time, there are certain signs showing that people have been gathering all around the globe to play a game of chance. Ancient Chinese records refer to keno slips which were applied around 200BC as some sort of lottery to finance state works – possibly including the construction of the Great Wall. Ancient Greeks loved to play with dice, while the first gambling chips were invented in Ancient Rome as a loophole to avoid punishment for the then illegal gambling.
Since then, a lot has changed in the gambling industry and many of these disruptions are due to digital transformation: players can now bet on virtual (computer simulated) horse races, shake their mobile phones to roll a die or bet on teenagers playing video games. However, some things have not changed: the excitement of the game, the anticipation of the outcome and the joy of winning is still exciting millions around the world.
In simple terms, blockchain is a globally distributed immutable ledger that facilitates the process of tracking transactions. Transactions can include anything of value (e.g., real-estate, intellectual property, vehicles, software, contracts), but are mostly used for virtual currency (i.e., cryptocurrency). Once some data has been recorded inside a blockchain, it becomes very difficult to change it, so it is almost impossible to tamper with them. So what does it have to do with gambling?
As the technology of blockchain is appearing in many industries, cryptocurrencies are becoming increasingly popular among gambling service providers. Many online casinos are already using digital currencies, and some betting agencies have also started accepting crypto. More and more players and gambling service providers are taking advantage of this emerging technology - but for different reasons. Some players prefer paying with crypto to avoid revealing their identity and the source of their income. Gambling service providers might adopt this technology because the transactions are non-reversible, limiting the risk of fraud and non-payment.
Some online lotteries have already introduced Bitcoin lotto, where players can use Bitcoin to deposit and withdraw cash. Although currently Bitcoin is the most widely used crypto in the sector, some online casinos and betting agencies offer altcoins such as Ethereum, Binance coin and Litecoin.
Despite these benefits, there is clearly a dark side of utilizing cryptocurrency in gambling as it could be an obvious choice for money launderers who want to stay anonymous. Moreover, from a regulatory point of view, cryptocurrency is tricky, since no banking institutions are engaged with transactions; therefore, it is difficult to enforce rules and regulations on the transactions. If players remain anonymous, player protection against excessive gambling is also near-impossible.
Though broad understanding of blockchain technology is still limited, the possibilities for impacting a gambling company’s business model are vast. As the Deloitte Tech Trends 2022 states, CEOs and CIOs need to decide how early they want to be on the adoption curve.
How could the blockchain decentralization improve the way gambling companies communicate, collaborate, exchange data with other ecosystem stakeholders and what new revenue streams, business process improvements could be unlocked by maturing blockchain platforms? These are the key questions gambling executives must ask themselves
- says Dániel Bognár, Director, Gambling Advisory at Deloitte Hungary.
Beacon technology is primed to transform the way players interact with gambling companies and brands. Imagine you are heading home from work, walking past a local gambling store and your mobile phone chimes, displaying a notification: “Your team is playing tonight! Bet on Real Madrid with special odds for tonight’s Champion’s League final”. Sounds futuristic, right? Well, this kind of proximity marketing already exists today.
The easiest way to understand the way beacon technology functions is thinking of it as a lighthouse. Just as lighthouses mark locations with beams of light, beacons are physical landmarks that send signals to mobile devices. Beacons are wireless transmitters that can send data and notifications through Bluetooth to smartphones within a certain perimeter.
You may be surprised that the first commercially viable beacons were introduced by Apple. Its initial duty was to assist retailers streamline payments and local deals. In December 2013, iBeacons were installed in 254 US retail stores. In 2015, Google also entered the market and launched its own type of beacon. Google Eddystone also utilizes the concept of beacons in Google Maps. Beacon technology has come a long way since then and Global Market Insights predict the beacon market is set to exceed $25 billion by 2024. It is also daunting to take in that Android devices make more than 40 billion inquires annually for beacon-related content from Google services.
The application of this technology has seemingly no limits: there are beacons installed in stadiums, sending the viewers game-related notifications, beacons set up near crosswalks to alert phone users of oncoming traffic and even beacons in so called snack ball machines designed for dogs that throw a tennis ball and give rewards to the pet after fetching it.
What this means for gambling stores is that not only can they send instant messages to potential players nearby but also that with high quality beacons they can track how many people visited their store, how much time they have spent there and check their in-store movement. These datapoints can later be cross-referenced with transactional history, providing highly valuable insights.
- says Mátyás Leitner, Senior Consultant, Gambling Advisory at Deloitte Hungary.
However, gambling operators must be cautious: too many notifications might result in users becoming immune to proximity marketing, and highly customized offers might even drift customers away. In an era full of digital impulses, customers can quickly become unaffected by advertisements and unconsciously swipe them away.
Therefore, gambling firms need to take into consideration how they can benefit from beacon technology: whether it is utilizing it for in-and-out of store marketing or advanced data gathering or other innovative interactions with players. The possibilities are endless.
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