DAOGroup: forget crypto evangelism – this is paymentsBy Lewis - 11 February 2021
Glen Bullen, Chief Commercial Officer at DAOGroup, expresses his belief that gaming businesses who haven’t yet integrated crypto-based payments are missing out on gaining a competitive edge, citing crypto as an effective acquisition strategy for tech-savvy players in newly white jurisdictions.
As a company, we’ve made it our mission to transform the online gaming industry’s understanding and use of cryptocurrency in betting transactions.
We launched DAOWallet as our flagship solution to enable operators to benefit from an advanced cryptocurrency-fiat gateway that can provide third-party cryptocurrency transactions without the need for additional AML and compliance processes.
This means we can give operators the tools and means to attract players who want to use crypto as their payment method without any compliance or AML concerns. Developed specifically for iGaming, there’s no other wallet quite like it on the market – especially when it comes to performance and delivery in the gaming space.
What brands have gone live so far?
DAOWallet is live on 1Click Games and MoneyMatrix; and in partnership with BetConstruct; with a further eight operators and platforms currently in the process of signing and on track to launch. We’ve had some really great feedback on our wallet since it launched – and I’m really looking forward to the direction we’re taking.
How significant a role will crypto wallets play in iGaming’s future?
When it comes to payments, the digital wallet is going to be a game changer. Mobile transactions already account for 54 per cent of digital payments in Europe and are growing globally by 10 per cent. Tie that in with crypto’s surge in 2020, and there has never been a better time to be in business.
We’re a gaming company at heart, rather than a team of crypto evangelists – so our goal is to provide a tailor-made product line that is of benefit to both players and operators.
DAOWallet is a cryptocurrency-fiat gateway, enabling players to deposit and withdraw in the crypto or stable coin of their choice, while our relationship with operators is as a straight-up processor, with all their transactions being in fiat.
Operators know that they need to appeal to new audiences to get ahead post-COVID. With a very successful launch behind us we’re confident we are going to be expanding distribution substantially this year, ensuring players will have an ever-expanding list of casinos supporting crypto transactions to choose from as more and more operators get on board.
What is the advantage of using a crypto wallet specialised for gaming?
The main problem with non-specialised wallets in the iGaming space is the lack of strict AML and KYC protocols and procedures in place, which raises red flags for compliance teams; and, for the players, poor functionality on the deposit and withdrawal processes, causing even the most dedicated of crypto user to give up on that site.
The thinking behind DAOWallet is simple: we want to clear away the complicated nature of existing transactions with a user-friendly interface designed specifically for gaming transactions. Our design is simple and clean, allowing operators to scour information and process transactions quickly and accurately.
This will be music to the ears of crypto casino managers who have been dealing with painful workarounds with wallets not built for business purposes. Requiring just a couple of lines of code to integrate the wallet, setup is also pain free and can be done in a variety of coding languages, including Python, Java and C++.
Where our wallet really stands out is the ability to forensically analyse the history of incoming cryptocurrency transactions. In effect, this is an integrated, bespoke service that can check whether crypto has been seen in dark markets.
We see this as a gamechanger for the licensing of crypto casinos going forward, with many current regulators scared off by the threat of pseudo-anonymous crypto transactions and its implications for AML.
How do crypto wallets benefit customers?
As crypto technology continues to be integrated into the mainstream gambling industry, I’m confident that the benefits it brings will be a gamechanger for the way players come to see crypto as a mainstream payment option and significantly change the industry for the better with a raft of new technology.
For players, crypto offers a revolutionary level of enhanced speed of transactions, as well as wins that can be processed instantly. For operators, the lack of charge backs on crypto transactions will reduce a significant amount of the risk and cost associated with the gaming process and free up plenty of resources, which in turn should translate into more competitive pricing for the player to enjoy.
How do you plan on cornering the iGaming market with DAOWallet?
By offering the best product available! DAOWallet supports operators by allowing them to offer their customers another payment and withdrawal option – in this case cryptocurrency or stable coins. And the more options a player has for depositing and withdrawing their funds the better.
Critically, our relationship to operators is as a processing company no different to any other PSP they currently chose to offer. We are licensed to process cryptocurrency into fiat and that is what we do for the operator. In effect, what we offer is simple, clean and wholly compliant, which we hope will be a key tool for educating the market and presenting it with the facts.
In terms of specialisation and what we can deliver, I’m fully confident that we have the tools and means to be able to establish ourselves as the industry’s preferred payments partner for all things crypto. However, there are still barriers out there when it comes to showcasing the clear benefits that integrating crypto payments can offer for operators.
We are working hard to remove these, especially when it comes to the implications of offering it to customers from a compliance and/or AML perspective, which are routinely misunderstood.
But with PayPal’s endorsement of crypto payments at the end of 2020, alongside many other major PSP already having crypto payments aboard, we can arguably say that crypto gaming has already entered the mainstream. We’re just confident we deliver a better product.
Are gaming businesses in general, not just iGaming, missing a trick by not assimilating crypto-based payments into their offering?
Without a doubt – and so much so, I believe offering crypto-based payments will be key for acquisition and retention in 2021. This is for a number of reasons. The first is that in territories such as CEE across the retail and online space, we’re looking at a new, emerging tech-savvy player as the ideal potential customer and is only just getting introduced to the world of regulated gaming.
I also believe this demographic will be key to powering a lot of Europe’s growth over the next year as they tick all the boxes for an untapped segment in markets that are only just starting to establish themselves.
Here we’re talking newly white jurisdictions, such as Ukraine, Armenia, Belarus and Georgia, with players most likely in their 30s with plenty of disposable income and less propensity towards debt given the region’s lower cost of living.
Likely ardent sports and poker fans already, they’re going to have plenty of reasons not to be using local currency for the majority of their digital transactions. Offer players a way of gaming that cashes out faster than local currencies and you’ll be onto a winner.
Would you argue offering crypto payments via online and sportsbook is in effect an acquisition strategy?
Most certainly. It’s an area where we really make a difference. Firstly, as I’ve already mentioned, we’re able to completely remove any headaches to do with compliance, which enables us to provide a solid base for operators to onboard an entirely new demographic of player seamlessly and quickly.
The security side of our wallet is also second to none, which makes the customer journey far easier. We’re able to instantly identify the provenance of crypto coins coming in, providing operators with the ability to identify both VIP and problematic players before they even start playing.
This ties into the security of deposits for operators and negates all risk of charge backs and the like to ensure that they’re able to offer a more cost-efficient operation than ever before, which will again be hugely noticeable for the player.
Secondly, we shouldn’t forget about the marketing advantages and the boost it gives to your brand. Offering crypto-based payments alongside traditional fiat highlights your forward-thinking credentials as an operator and will likely resonate strongly with millennial audiences.
This is especially the case if you’re moving into a new market where crypto already has a foothold (such as LatAm or Asian markets), and your preparedness to show you’re here to support their ways of gaming.
To what extent does the volatility of cryptocurrency prices affect their use in the gambling space?
Given the bull run we’ve seen on Bitcoin in recent months – with just about every mainstream media pundit predicting astronomical levels – that may certainly affect crypto player’s interaction and usage of it.
However, it is essential to separate the usage of crypto as a transactional medium of exchange for gambling from those who would see it as a speculative asset to ‘pump and dump’.
More and more industries are starting to get in on the idea of specialised coins, or tokens, such as Facebook’s Diem or Morgan Stanley’s own offering, which enables a specialised product to be created that serves a specific purpose, and is, in theory, relatively immune to the volatility of typically traded coins.
Finally, how do you see the investment side of the crypto-gambling space playing out in the coming months?
The mainstream adoption we’re seeing now will continue to drive increased interest from operators and platform providers, which will inevitably attract investment.
Having crypto payments is, in effect, a competitive edge, whether that’s Europe, the CIS, Africa or LatAm and the smaller, agile PSPs are certainly going to be watched carefully by US and European capital.
We can see that on the regulation side. We’ve seen the Maltese Financial Services Authority (MFSA) issue its first crypto payments licence, which is likely to quickly accelerate the process it originally started in 2018.
I’m confident that PSPs are going to have a major part to play in operators’ acquisition strategies this year and with general acceptance now at a tipping point, we’re likely to see major changes in the size of this industry vertical. As one of the most specialised providers out there, we’re looking forward to playing a major part in that.