The gambling industry has always been at the forefront of new technology. The internet hadn’t been around very long at all before the first online casino hit the web, and as long ago as the 1970s land based casinos were using primitive gaming machine screens as we know them today for the likes of video poker.
Mobile gaming is another area where the gambling industry was quick to get to work, and the trend is continuing with the next step in the way we use the internet.
The metaverse.
You may well have heard a bit about this on the news and rolled your eyes, but if history shows us one thing, it’s that yesterdays bonkers ‘it’ll never work’ idea is tomorrow’s global phenomenon.
Millions and millions have already been poured into the metaverse, whether that be buying virtual land, taking out virtual advertising space, or selling virtual artworks; but one other area where lots of money is changing hands each day is gambling.
Gambling in the metaverse is still in its’ infancy, and it is causing regulators a real headache since it is completely new territory for them, literally and figuratively, but a visit to one of the poker rooms in the metaverse will prove there is definitely a demand.
What on Earth is the Metaverse?
The Metaverse is a virtual world, so it’s not ‘on earth’ at all.
A lot has been made of Facebook, now known as Meta, creating the Metaverse, which makes it sound as though there is just a single virtual world owned by Meta, but this isn’t the case.
Meta are creating their own Metaverse, but there are many different Metaverses, and they are all decentralized. This means they are not owned by any one person or legal entity, but exist on the blockchain via Web 3.0.
Sorry, yes, another new-fangled tech term to grapple with if you want to get your head around this. What’s Web 3.0? It’s not necessary to go into detail here, just think of it as the next iteration of the internet which allows further blurring of the lines between reality and virtual reality. It has also been described as a 3D version of the internet.
Inside each of these virtual worlds is a huge city to explore, full of all manner of weird and wonderful people, games, and buildings. For example, there are art galleries, JP Morgan Chase has an ‘office’ there, and Barbados even has a virtual embassy in the metaverse. Companies can take out advertising space too – stand in the right place and you can watch company video presentations or click a poster and you can be redirected to the company’s website.
Oh, and Justin Bieber has held a virtual concert in the metaverse too.
Decentraland is one of the biggest decentralised metaverses, and Sandbox is another, so each will be different in terms of what is inside and how it looks, but they are all the same thing on a fundamental level.
Users create an avatar that can run around and explore or teleport to specific coordinates, and they can collect items known as Non Fungible Tokens (NFTs) which can be used as currency. These can be items for the avatar to wear, or pieces of digital art, etc. However, people can also spend money in the way of crypto currencies, with Etherium being the main metaverse player, but many metaverses also create their own coins for people to use.
Eventually, the metaverse will allow people to shop, work, relax, consume entertainment, and meet friends just like in the real world. The graphics on a desktop are pretty dodgy at the moment as you can see – although using something like an Oculus improves this, and is how the Metaverse is really designed to be experienced – but eventually they will become much better, allowing people to see 3D versions of items they are considering buying, for example, which will make online shopping in the Metaverse a much more realistic experience than regular online shopping.
But the dodgy early 2000’s computer graphics belie the sophisticated technology whirring beneath the pixels, especially when it comes to money.
How Does Gambling Work in the Metaverse?
It’s certainly not as simple and convenient as gambling online in the normal way, but it is a way to do so with more anonymity.
This is because the currencies used in the Metaverse are crypto currencies (many metaverses have created their own crypto currency) and there are no accounts to sign up for and no regulatory checks to go through.
It does mean that you need to change your real world money into crypto before you can use a casino or poker app in the Metaverse though, and there are a few steps from doing this to then being able to use that money in the Metaverse.
We won’t go into it in detail as this isn’t a guide, and the question of whether or not this sort of thing should even be going on is complex, but for information purposes, the basic steps are:
- Choose your favourite Metaverse.
- Find a crypto exchange to sign up to.
- Exchange real world fiat funds for the crypto currency used in the Metaverse you are using.
- Get Metamask or Bitski or an equivalent. Apps that connect your crypto funds to the Metaverse. They may also allow you to buy crypto direct which makes things easier.
- Go to your Metaverse, connect your virtual wallet via Metamask/Bitley, and your funds should be useable.
It’s fairly convoluted then, but a lot of these steps only need to be done once.
If you win enough that you want to withdraw it and spend it in the real world then the process is reversed, but there may also be extra steps depending on which metaverse you are using.
Alternatively, provided the option exists, you can spend your winnings inside the metaverse on real world products.
For example, if a trendy sneaker shop and a store in the metaverse you are using, you could browse their products, pick and pay for something using your winnings which still exist as crypto, and have them delivered to your actual real life address.
With crypto currencies existing on the block-chain, every single transaction is recorded and is provable, so there can be no issues such as a seller claiming they were never paid, because the record is there for anyone to see.
NFT’s and Decentraland
There are more casinos in the planning for alternative metaverses, and the way in which they work might be different, but since Decentraland is the biggest Metaverse for gambling at the moment, it makes sense to cover their process in more detail.
You see, to play in their many different poker rooms (run by Decentral Games), players will need to own or be delegated a wearable NFT.
At anything between £3.5k – £10k these cost a pretty penny, and their value can appreciate too, so those who own them and delegate them out to people who can’t afford to buy their own will take a cut of the wearers winnings as payment.
For this reason, they often want to be sure the player they are delegating their NFT to knows how to play poker properly, so it’s not really any good for beginners.
The way this is usually handled is via Discord, a social interaction app favoured by those active in the metaverse, and the metaverse has the function built in so that the owner of the NFT can delegate it safely without risk of it being stolen or lost.
Once NFT’d up, players are given a daily allocation of free chips which they can use to try and win ICE and experience points by completing daily poker related tasks.
ICE is the casino currency, and can be used to upgrade or create NFTs, or alternatively you can swap it for another crypto currency which can be used to buy real world items.
There is also a regular casino in Decentraland, called Tominoya, where players can gamble on blackjack, slots and roulette with crypto, so without the need for an NFT, but free chips are available here too which can be used to enter competitions where cash prizes are handed out.
What is the Gambling Experience Like in the Metaverse?
It’s a little daunting to be quite honest, but also fairly limited at the moment.
Poker works well because you are playing against other users so you don’t need to worry about foul play, but it would be harder for those with doubts to trust slots or roulette for example.
That said, these are run using an RNG just like a standard online casino.
When it comes to sports betting this doesn’t yet exist in the metaverse as far as we are aware.
However, there is clearly a demand for more products because the poker tables are packed, despite the rest of the metaverse being fairly empty. In fact, one of the biggest criticisms of the metaverse is that hardly anyone is using it, so for poker to be bucking the trend and attracting 6,000+ players a day speaks volumes.
When you are actually playing the game it isn’t a million miles off what you might expect.
In Decentraland players are given free casino chips that reset each day, and they use them to complete tasks like ‘See the flop fifteen times’ or ‘Get a flush three times’ to earn currency as explained above.
The cards are dealt by frogs, or to be more specific, the Pepe the Frog character from the memes. He is the dealer for all games, and if you are playing blackjack or roulette he cries when you lose while chips rain down on you when you win.
At the poker tables coins rain down when you win and other players at the table burst into applause.
It’s fun to play, and much more immersive than playing at a regular online casino, but it has its limitations too. For example, on roulette many inside bets such as splits and corners aren’t yet possible, and the games are much more fiddly to operate using a mouse.
The ability to chat to others who are stood (albeit virtually) right next to you, is great though, and just the fact that you can see so many other people in there doing the same thing brings something new.
Gambling in the metaverse is in its earliest stages, and is not widely available either, but the potential is clearly there for it to be huge.
Is Gambling in the Metaverse Regulated?
No, and this is where things get complicated.
Not only are companies providing gambling apps in the Metaverse not technically operating from a physical regulated region, but the ‘currency’ used is not a fiat currency.
However, the only way most people can get hold of a crypto like Etherium to buy NFTs is by paying for it with pounds, dollars, rupees, or whatever other fiat currency they might be working with.
This means anyone who can get hold of crypto currencies can gamble in the Metaverse with no checks, no support, and no consumer rights or protection.
The potential issues around underage gambling, money laundering, and gambling harm here are glaringly obvious, but since this is still such a new concept no governments have anything in place to deal with it.
Decentral Games say that they only allow players to play at the casino who are joining Decentraland from regulated regions, but there are more holes in this approach than in Swiss cheese, and it’s improbable that things will be allowed to carry on this way indefinitely.
Not only is it potentially unsafe and open to manipulation, but with the amount of money passing through the virtual casinos each month – Decentral Games took almost $20 million in revenue in Feb 2022 – governments are going to come knocking for their share eventually.
Anyone planning on exploring the metaverse for gambling should therefore make absolutely certain that they understand how it works before they part with any money.