If you are wondering how to start a crypto casino in 2024, you should probably be asking yourself if it is worth it. Before coming to a final answer there will be a number of factors you will need to consider.
The iGaming industry and the cryptocurrency market are in continuous growth and both have been following a similar path since they entered the digital market, mainly in terms of their introduction in new countries, regulations, and user acceptance.
As we mentioned, since online casinos and cryptocurrencies are both digital, it was sure that sooner or later they would end up complementing each other. SOFTSWISS chose to pioneer this merger back in 2013 by introducing the first crypto-ready online casino.
Below we will look at the difference between a crypto casino and a dice site, what it takes to launch a successful online crypto casino, and share our extensive knowledge in crypto gambling.
What is a Crypto Casino?
Crypto casinos are no different to traditional online casinos. However, they have several differentiating features. Before we dive into the concept and definition, it is necessary to understand the differences between a crypto casino, dice site and blockchain casino, as many users get confused.
A crypto casino is an online gambling platform that allows players to use cryptocurrencies such as Bitcoin, Ethereum, or others to wager on traditional online casino games without immediate involvement of the blockchain for each transaction. Players at crypto casinos register an account and deposit cryptocurrencies as they would normally do in a fiat currency. Game wagers are deducted from the player’s balance (or wallet).
A blockchain casino operates on a blockchain network, meaning that all aspects of its operation, including deposits, withdrawals, and bets, are recorded on a public or private blockchain. These casinos leverage the blockchain technology’s transparency and immutability of blockchain technology to ensure the fairness of games and the integrity of transactions. Players typically do not need an account to play at these casinos. Instead, they can connect their crypto wallet directly in-game while winnings and losses are transparently recorded on the blockchain.
A dice site is a kind of casino that typically offers one game – a dice-based probability game, where players bet on the outcome of a dice roll. Dice sites may be integrated into a broader crypto or blockchain casino, while others may be independent sites specialising in just one particular game without requiring players to register.
Dice sites are often considered to be the precursor to online casinos. In 2013, SOFTSWISS bridged the gap between dice sites and traditional online casinos by introducing cryptocurrency deposit methods and enabling the use of crypto in casino games.
Most users choose to play and gamble at crypto casinos because of the advantages they offer that are not found in traditional online casinos.
Advantages of a Crypto Casino
When considering the option of opening a crypto casino, weigh in on its advantages before starting this business.
One of the most significant advantages of crypto casinos is that the registration process differs from that of traditional online casinos. No personal details or verification documents are required there, just an email and cryptocurrency address. After reaching a certain deposit-withdrawal threshold, players will be prompted to upload certain KYC documents.
One of the strong points of cryptocurrencies is their security. On the one hand, there is anonymity, which helps to protect the user’s identity and personal data. On the other hand, there is the blockchain, the system by which transfers are made.
For users, the main difference is that when using traditional payment methods, they have to enter personal and financial data that leaves traces that a third party could access. When using the cryptocurrency payment method, no personal data is used, making it more secure and allowing the user to deposit more confidently.
Some crypto casinos work with crypto processors like CoinsPaid, an intermediary of sorts, to process payments. Still, payments are processed almost instantaneously, regardless of block processing time.
Does Volatility Affect a Crypto Casino
Cryptocurrencies are known for their volatility, a defining characteristic that can have the most significant effect on a crypto casino. Volatility in cryptocurrencies means that their value can fluctuate drastically in a relatively short period, with the influence being either positive or negative.
When analysing the impact of cryptocurrency volatility on an online casino or bookmaker, two aspects come into play: how fluctuations influence players and how they influence operators.
How Players Are Affected By Crypto Volatility
The main point to consider when analysing fluctuations’ impact on players in a crypto casino is that increases or decreases in the crypto value do not directly affect the player’s crypto-based winnings or losses. The impact of cryptocurrency volatility arises when players decide to convert their funds to fiat currency.
On the other hand, players are generally used to taking the risk of losing money, so slight fluctuations or negative trends do not affect their behaviour much. In the case of large negative fluctuations, many tend to switch their cryptocurrencies to stablecoins (Tether) to avoid further losses. Others prefer to continue betting, hoping that the value of the cryptocurrency will rise again.
How Operators Are Affected By Crypto Volatility
If cryptocurrency experiences significant fluctuations, be it an increase or decrease in value, crypto casinos will be affected. This can be either directly through the change in the fiat value of prizes, bonuses and promotions, or indirectly through the reaction of their players.
The typical rule of thumb is that most players will panic and want to withdraw their cryptocurrencies and then change them to fiat or stablecoins. This causes network congestion, making transactions more expensive and slower.
While there is no plan of action when these situations occur, many operators have adopted some tactics to minimise risks and to take after fluctuations. They:
- Adjust the betting limits in their games.
- Educate their players, teaching them how to prepare to face the volatility of cryptocurrencies.
- Offer bonuses in stablecoins, such as USDT, to motivate users to keep playing.
International Adoption of Cryptocurrency
Understanding the context of cryptocurrencies globally will be beneficial for determining the most commonly used cryptocurrencies and their prevalence across various countries.
Just because a country has regulated the use of cryptocurrencies does not mean that their adoption rate among online casinos and sportsbook players is 100%. Regulation indicates that the market in a specific country may be more receptive to a crypto casino, but it is not guaranteed.
- Bitcoin is the cryptocurrency of choice for players to make deposits. It is the first cryptocurrency and the most reputable.
- Bitcoin in some countries is considered a ‘commodity’ rather than a ‘store of value’ or ‘asset’.
- Although some casinos accept tokens, they can be seen as a complication as it is difficult for gaming providers to implement them in-game, and their success is heavily dependent on the widespread adoption of the specific token.
Before marketing your crypto casino brand to any geographic audience, it is important to know the legal status of cryptocurrencies in the territory. In part, it will help your crypto casino’s success. Researching the situation in each country can take a long time; so you can check the cryptocurrency’s legal status of the territory you are interested in.
For a crypto casino, it is not the total volume of transactions that matters, but rather the consistency with which cryptocurrency transactions are made within a specific territory or among a particular population within a country.
Below are the countries with the greatest crypto adoption rates over the past three years (scored out of 10) according to Investment Monitor 2023.
Most Popular Cryptocurrencies in 2023
At the moment of writing, there are around 10,000 cryptocurrencies in circulation. To better understand the crypto behaviour of players and also to determine which cryptocurrencies to incorporate in your crypto casino, it is essential to investigate the most popular cryptocurrencies in 2023:
- Bitcoin (BTC)
- Ethereum (ETH)
- Binance Coin (BNB)
- Tether (USDT)
- XRP (XRP)
- U.S. Dollar Coin (USDC)
- Solana (SOL)
- Cardano (ADA)
- Dogecoin (DOGE)
- Tron (TRX)
Due to factors such as volatility, distrust, and legal considerations, most players gravitate towards Bitcoin, the world’s first and most recognised cryptocurrency.
Steps to Create a Crypto Casino
- Market Research
- Obtaining a Licence
- Choosing a Software Provider
- Web Design
- Crypto Casino Payments
- Marketing Strategy
The first step to starting a crypto casino involves conducting market research. Information can often be the key to success or the road to failure. For this reason, collecting as much data as possible is important:
- Does your marketing expertise let you acquire crypto player traffic?
- Users of crypto casinos are players with experience and knowledge of cryptocurrencies and, generally, also of online casinos.
- Do you have the budget to target such players?
- To enter a niche market, you must be well prepared and have the financial backing to cope with expensive user acquisition channels.
- What games are best for a crypto audience?
- You need to know that some games only work with fiat currencies. What game providers will you need? Are there tools to enable games for crypto-play?
- What are your competitors doing, and should you do the same or different?
- Looking at competitors and learning from them is very important to prevent problems with fluctuations and to minimise risks. Then, it is up to you how to make your brand stand out.
With the accurate answers to the above questions, you can develop a unique proposition with a higher likelihood of success in the market.
Obtaining a Licence
A gaming licence is a permit issued by an authorised body of a country or territory (often called a jurisdiction). A gaming licence allows an online casino to offer gambling services to players.
At the moment, there are few licences that facilitate gambling services with cryptocurrencies. Considering that cryptocurrency adoption in the iGaming market is still low, holding a licence is critical to positioning your casino as a trustworthy choice for players.
Choosing a Software Supplier
The software of an online casino is the cornerstone for the project’s operation and success. To deliver excellent service to users, it must meet several essential requirements.
The software must be able to:
- Offer games that accept cryptocurrencies. Not all online casino games are crypto-friendly; you have to take the trouble to research and contact game providers or implement a hub that adds the best crypto games to your platform.
- Support cryptocurrencies that players want to play with. Previously, we showed you which cryptocurrencies are the most popular to play online casino games. It is key to success that your crypto casino platform supports these cryptocurrencies.
- Offer a system for managing your deposited currencies. The cryptocurrency processor is a vital part of every crypto casino’s operation. The best processors, like CoinsPaid, offer both hot and cold wallet options.
- Provide an in-game currency conversion. It is one of the main features that the best crypto casino platforms must have. It allows players to play games that do not accept cryptocurrencies. This feature converts the crypto balance into wagers supported by the game.
When launching a crypto casino, game availability stands as a critical factor. Certain games and providers may not inherently support cryptocurrency payments. In this case, the Crytpo Casino solution from SOFTSWISS is an excellent option that allows users to bet in games not originally designed for cryptocurrencies.
Here is a list of the most popular games that accept cryptocurrencies and the best providers supporting crypto as a payment method.
The main differences in the design of a crypto casino compared to a traditional online casino are often associated with the target audience. To understand where such differences come from, we must consider that the age of players in traditional casinos ranges from 30 to 40 years old, and that of crypto casino players – from 20 to 30 years old.
When thinking about the design of the crypto casino site, it should focus on a younger and more tech-friendly audience. This can involve adjusting the game lobby design, categories of games displayed to players, and game bundles and categories.
In terms of the underlying technology, a crypto casino is no different to a regular online casino with fiat currencies.
Crypto Casino Payments
Regarding payment methods, the first thing to know is that crypto casinos only process payments made in cryptocurrencies through payment processors such as CoinsPaid, Mercuryo, and others.
If you are considering starting your crypto casino, here are three differences between crypto casino payouts and traditional casino payouts that you will find interesting:
- The commission crypto casinos pay for each transaction is much lower than those with fiat currencies. The former pay less than 1.5% fees and fiat currencies are around 8% or 9%.
- The speed of processing is another crucial difference. Cryptocurrency transactions are almost instantaneous, contrasting with fiat that may take up to seven days.
- Finally, cryptocurrency payments have no chargeback, unlike traditional payment methods. This is an advantage that helps crypto casinos avoid unnecessary losses at the hands of fraudulent users.
As the payment process at crypto casinos can be unclear for newcomers, here is a brief overview of the steps a player should follow to deposit and withdraw money.
To make a deposit the player:
- Goes into the account and simply opens the payment methods.
- Clicks on deposit and chooses the cryptocurrency (BTC, LTC, ETH, DOGE, USDT or other).
- Scans a QR code or copies a wallet address, generated for each player.
- Goes to their crypto wallet (site or application) and pays to the address they copied from the casino.
To make a withdrawal the player:
- Goes to their wallet in the player account.
- Clicks on withdraw, chooses the cryptocurrency and wallet address for withdrawal.
- Confirms the withdrawal via email.
- Receives the transfer to their crypto wallet.
Player Acquisition Strategies for Crypto Casinos
Regarding marketing strategies, the main difference between crypto casinos and traditional casinos lies in the strategy for acquiring new players. Applying the same approach in both cases would be a grave mistake, potentially resulting in losing money without acquiring players.
Here are insights shared by SOFTSWISS experts that are worth considering when starting a crypto casino:
- It is essential to consider that not all users of traditional online casinos are interested in playing at crypto casinos. Although they have benefits, crypto casinos demand specific knowledge and expertise that only some users are willing to acquire. Knowing how to find and choose the right sites to promote your crypto casino is necessary to attract the right users.
- Using the most searched casino reviews and affiliate sites as a communication channel can be a bad investment as they are aimed at beginners or fiat casino users looking for bonuses or new online casinos. The audience for crypto casinos is more specific, with niche affiliate sites, forums, and communities.
- Communication channels also play an essential role. Sharing knowledge, trends, or opportunities offered by crypto casinos can capture the interest of potential players. Chat platforms like Telegram or Discord are popular for discussions and information exchanges about cryptocurrencies.
These examples illustrate two methods to acquire players. Due to the dynamic nature of the market, crypto casinos’ marketing strategies are often a process of trial and error.
Closing Thoughts On Starting a Crypto Casino Brand
Starting a crypto casino is an excellent idea with a high potential for profitability, but it’s one that requires expertise and rigorous preparation. If you want your crypto casino to succeed, remember the following:
- Unlike traditional online casinos, crypto casinos demand expertise in more than just cryptocurrencies.
- Crypto casino operators should understand how to market their brand to a niche audience and understand the intricacies of working with a high-risk online business.
- SOFTSWISS’ experience tells us that casinos offering cryptocurrency and fiat payments are more profitable than only crypto ones. The main reason is that crypto users are a smaller niche, and going with a non-fiat crypto casino option may miss the opportunity to attract more of users.
If you have a background in online gambling and understand the needs of crypto-first players, SOFTSWISS professionals will be happy to help you start your online crypto casino.