NFTS IN IGAMING ArtemisDiana/Adobe Stock
The
potential role of NFTs in iGaming
Anjali Sooknanan explores the potential for NFTs as a catalyst to customer base expansion and player retention
WHAT ARE NFTS? Before exploring the role of NFTs in iGaming, what are NFTs and how do they work?
Non-fungible Tokens (NFTs) are digital assets that are stored on the blockchain. A blockchain is a decentralised ledger, meaning transactions are permanently logged, stored, and distributed across a shared network of computers, eliminating the need for a central authority. NFTs are not interchangeable because each token is unique, they come in the form of digital art such as custom illustrations,
the iGaming space, there are opportunities for forward-thinking gambling businesses to incorporate NFT elements into their product offering. The most active NFT market remains on the Ethereum blockchain meaning gas fees for buying, selling, or moving NFTs around are extremely high, hence traditional operators have tended to steer clear of NFTs. Nevertheless, NFTs present a chance for the industry to attract a younger, digitally native audience who may not look twice at more conventional gambling products.
A
While NFTs cannot be used as a payment method for online casinos, there have been a variety of approaches when using NFTs in online gambling. A common approach has been gambling the NFTs themselves, an example of this is from DraftKings, one of the most prominent iGaming companies to incorporate NFTs into its online gambling platform. The DraftKings marketplace allows players to buy, sell and trade NFTs. Specific times and dates are scheduled for a particular NFT to drop, and users can then sell their NFTs on to the secondary market. Matt Kalish, co-founder and president of DraftKings, said: “The overall NFT market has already surged to over $2.5 billion in sales volume for the first half of 2021, and so whether someone is well-versed or barely familiar with digital collectibles, we envision DraftKings Marketplace being a premier platform for
6 APRIL 2022 GIO
s the iGaming industry continues to grow, innovation is key for operators to expand their customer base and increase player retention. While Non-fungible Tokens (NFTs) are new to
all within a trend that is decidedly here to stay.” The downside of the DraftKings marketplace is that users cannot withdraw NFTs to store on a crypto wallet to trade elsewhere. Nevertheless, the initial drops reaped considerable success, enabling an exclusive sports distribution relationship between DraftKings and Autograph, an NFT platform co-founded by professional American football player Tom Brady. Recently, Autograph teamed up with Lionsgate and Twisted Pictures to release on DraftKings Marketplace exclusive digital collectibles from the horror franchise Saw. A variety of companies have also taken advantage of the rising popularity of NFTs by offering their own digital assets for sale. For example, the US National Basketball Association (NBA) has an NFT platform called NBA Top Shot. The platform was launched by Dapper Labs in collaboration with NBA, and it allows players to buy, sell and trade NBA moments. Since the platform launched in 2020, Top Shot has collected almost $750 million in sales over the course of around 10.5 million transactions, it is a notable example of how NTFs can build a presence in mainstream sports.
PART OWNERSHIP
The introduction of NFTs in iGaming has the potential to encourage the industry to shift from the requirement of cash rewards. Some NFTs designate part ownership of the online casino to players, grant access to exclusive events, or offer special promotions. Gambling Apes is a NFT collection of 7,777 unique apes, the main selling-point of the project is its focus on the metaverse casino. Gambling Apes offers a
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