Top 5 Technologies That Changed Online Gambling

Amid record-high inflation and a relatively unstable political climate, more Brits are putting high stakes in online casinos than ever, according to the U.K. Gambling Commission (UKGC).

Although a minority in the overall gambling industry, the UKGC reported online gambling had logged an all-time high participation rate of 27%. Furthermore, the Remote Betting, Bingo, and Casino sector produced a gross gambling yield of GBP£6.9 billion (USD$7.9 billion), with online casino game revenue comprising more than half. It’s 18.4% higher than the previous period.

It isn’t that difficult to see the reasons for the boom in online gambling. All it takes to play are a computer or mobile device and a stable internet connection, which allow players to gamble anytime, anywhere. Such convenience wouldn’t have been possible if not for several key technologies of the modern age. Here’s an in-depth look into each of them.

1. The Internet

They say that ‘necessity is the mother of invention’, and that’s as true for the internet as for any other innovation. Once a secure way for governments to share data without disruption by open war or espionage, the World Wide Web soon bridged countries and cultures no matter how far apart they were. Ideas once unheard of in most parts of the world later became prominent.

Online gambling is one such idea, with its roots at the last place you probably expect. With the passing of the Free Trade & Processing Zone Act in 1994, the Commonwealth island nation of Antigua and Barbuda in the Caribbean saw a rise in online gambling. Of interesting note is that the law mentions neither ‘casino’ nor ‘gambling.’

A year later, a customer from Liechtenstein made the first online purchase for an International Lottery manual draw. Other Caribbean countries followed suit in the following years, hosting their respective gambling sites. Around the same time, online gambling took root in the UK, primarily for sports and race betting.

Experts credit the rise of online gambling around this time to two instrumental innovations. The first is online gambling software, which works by generating random numbers (although it isn’t naturally random, as they’re algorithm-based). The system ensures fairness while playing since winning depends on a player’s luck.

The second is encrypted communication that secures remote transactions between the customer and the online casino. Security back then paled compared to security today, but it was enough to facilitate the transfer of wagers. One form of encryption was the Data Encryption Standard, in use since the 1970s, though it fell out of favour after Deep Crack cracked it open in 1998.

Over the decades, public and political opinions on online gambling have swung left and right. Regardless, the number of online gambling sites has reached thousands as of this publication. The UKGC, for instance, has issued over 3,600 gambling licences to over 2,600 online gambling companies operating in the country.

2. Live Casino

The idea of human dealers communicating with players via the internet dates back to the early years of online gambling. However, technological limitations in the 1990s and the mid-2000s prevented it from going beyond the drawing board. Back then, online gambling was limited to desktop PCs and stable internet, both of which were luxuries. 

Then came revolutionary technologies that birthed the smartphone, like the world’s first iPhone in 2007. At a time when most mobile phones had physical keypads, the iPhone had its keypad integrated into the screen virtually. The result was a wider screen, offering a more immersive experience when watching a video or browsing the Web.

These innovations, coupled with significant improvements to the current tech available, inspired the return of live casinos to the online gambling scene. For instance, the steep increase in global internet speeds made live streaming more manageable. For the first time, players can feel being in a casino without actually going to one.

Many live dealer providers include special real-time lobbies where players can select the table and dealer they wish to participate in. More sophisticated setups also include exclusive tables for particular gambling platforms for online casinos like Stake.com – where branding such as logo is integrated into the set.

The hardware and software setup for a live casino varies. However, one can’t stream a round of roulette or show the dealer’s hand at poker without the following components:

Cameras

Showing players every camera angle of the deal table goes a long way in promoting a fair game. Small but powerful streaming cameras enable live casinos to provide clear and crisp video feeds. For instance, a roulette table typically employs three cameras: one for the table, another for the wheel, and a third for an in-picture display.

Game Control Unit (GCU)

Arguably the most crucial part of any live casino is the GCU. It lets the player know if their wager is a winner by encoding and transmitting game data from the deal table to the stream. Every table playing a specific game requires a GCU.

GCUs – and cameras, to an extent – generally employ optical character recognition tech. To put it in simple terms, it turns any text it sees into data, allowing the GCU to communicate it to the user interface. This tech is helpful if a player wants to view their deal history.

GCUs are also crucial to the dealer because they receive information on online players and their respective wagers. The data is displayed on the dealer’s monitor.

Live Chat

During the game, live casinos maintain a live chat function in case the game runs into any hiccups. The chat is connected directly to the dealer, who must know the rules of the game they’re playing.

The appetite for real-time gambling is incredibly high, with gambling platforms, such as Stake featuring dozens of live casino games across different types of games, providers, and tables.

3. Digital Wallets

Digital or electronic wallets were introduced around the same time as online gambling. The first electronic transaction in history involved ‘Ten Summoner’s Tales,’ Sting’s fourth studio album, which was paid for by credit card for USD$12.48 in 1994 (GBP£21.79 in today’s pounds). The mode of payment was protected via encryption. 

Digital wallets store payment information in a secure electronic container – bank account information, credit or debit card details, coupon codes, etc. Encryption converts this information into a string of text that hackers can’t discern even if they obtain it. Once the intended recipient receives the data, the string reconverts to actionable information.

While players can take heart at the lengths gambling sites go to secure their data, an extra layer of encryption never hurts anyone. As services designed for keeping payment information under lock and key, digital wallets are a more secure option than inputting the information on site. 

Many gambling sites encourage players to pay via digital wallets. From their perspective, digital wallets deliver faster payments than standard bank transfers, estimated between a few hours and the following day. They also charge consumers less for transactions than banks.

More importantly, the UKGC and the Department for Culture, Media and Sport outlawed using credit cards for gambling in 2020. The measure is to prevent players’ debts from ballooning due to excessive gambling. It becomes a problem when people lose track of their spending or wager money they don’t have.

4. Blockchain

In 2009, another groundbreaking technology entered the modern economy: blockchain. Instead of storing information on a single central database, blockchain does that in a distributed network of ledgers or ‘blocks.’ That way, even if hackers manage to get into a terminal, it won’t have the complete set of information required.  

Blockchain laid the foundation for another innovation: cryptocurrency, specifically Bitcoin. Its value is based on supply and demand among the community instead of an accepted economic standard like gold reserves. Experts approximate that as many as 12,000 cryptocurrencies are circulating worldwide, with 1,000 new ones entering the market monthly.

The online gambling sector only took notice of cryptocurrencies three years after Bitcoin became known to the world. Technically, players don’t store their crypto winnings in their digital wallets since that data resides in the growing blockchain. They only hold the key to access them; losing that means losing access to all your crypto.

Crypto gambling offers a near-instantaneous process of betting and earning crypto compared to digital wallets and bank transfers. After signing up for an account on a gambling site, the next – and typically last – step involves clicking a confirmation URL. There’s no need for a player to wait several hours to cash in.

Online gambling sites can accept either crypto only or crypto and fiat, though the latter is more prevalent. But in countries where payment via fiat or some representative currency options (e.g., credit card) is limited by law, crypto betting is a decent alternative.

That being the case, some aspects of crypto trading are holding it back from being widespread, particularly its volatility. Aside from its value mainly determined by supply and demand, crypto is still a relatively new way to pay, let alone bet. Economists worldwide are currently trying to understand how these crypto-assets, as the UKGC calls them, can work to everyone’s benefit.

5. Augmented and Virtual Realities (AR/VR)

AR/VR technology is among the new additions to online gambling. As if a live casino can’t get any more immersive, AR/VR brings that immersion to an entirely new level. There are already video games designed to be played on VR headsets or AR-ready devices, so it stands to reason that online gambling can take advantage of these innovations.

While inextricably linked, AR and VR work in different ways.

• AR adds virtual elements to a user’s real-life vision, hence ‘augmented.’ One notable example is Pokemon Go, which utilises the player’s phone camera to add and operate game assets on whatever it sees. That’s how you can see (and capture) a Pikachu on the sidewalk you’re currently walking on.
• Meanwhile, VR replaces the user’s vision with a ‘virtual’ one, primarily through VR headsets. It provides a more immersive experience, bringing the user to the actual game environment, whether in the middle of a major space battle or in front of the deal table. All this is made possible with a system of cameras and external sensors.

Together, these technologies make up the so-called Metaverse, a buzzword prominent tech giants have been throwing around as of late. It’s believed that the Metaverse will address several issues that have hampered online gambling’s development for years, such as:

• Limited game selections – Online gambling sites aren’t limited to the number of games they offer since they’re not bound to a brick-and-mortar location. VR boosts that benefit by integrating as many casino games as possible in a virtual space.
• Player posture – Playing on such sites requires sitting for long hours in front of the PC or mobile device, which isn’t healthy. Most VR setups need the player to stand while playing, even move a little (though enough open space is necessary).
• Lack of human expression – Competitive games like poker employ facial expressions to trick other players into making the wrong moves. VR can generate avatars that follow the user’s body language, making the game more enjoyable.
• Payment security – As they’re a fundamental part of the Metaverse, cryptocurrencies will most likely be the form of virtual payment. The level of security blockchain offers ensures not a single penny of wagers and winnings are lost in transit.

Like crypto, it’ll take a long time for AR/VR to become mainstream. Nevertheless, it has already opened up plenty of opportunities for online gambling’s continued growth.

What’s the Future of Online Gambling Tech?

Online gambling is the culmination of years of technological advances – 

• The internet gives casinos a new platform to extend their reach.
• Live streams facilitate communication between dealer and player.
• Digital wallets allow alternative modes of payment like crypto.
• AR/VR tech will bring a level of immersion like never before.

There’s no reason for online gambling to stop growing with these technologies. Every time a new tech becomes the talk of the town, the industry will contemplate whether or not it’ll be of use. Perhaps in the following years, crypto-assets will be a more stable means of payment, and AR/VR devices will be more affordable.