CalvinAyre.com’s Becky Liggero discussed with Lars Lien, founder and CEO of iGaming firm Luckbox, the use of cryptocurrencies in the gaming industry.
Blockchain and cryptocurrencies are big news everywhere, yet so far this hasn’t translated into traditional institutions letting their guard down when it comes to doing business with those whose line of business involves these new technologies.
“I think this is one of the kind of underappreciated problems in the space, and one of the key blockers for mainstream adoption in our industry,” said Lars Lien, whose company Luckbox considers itself “in the cross-section between eSports, digital currencies and gambling.”
He explained, “These are very different sets of challenges from the bank’s point of view, from the payment processor point of view. So the reality is, right now, if you’re a big operator, you simply cannot use cryptocurrencies, because the payment processors and your banks will go, ‘Well, we don’t understand this from a compliance and AML [anti-money laundering] point of view. We’re not going to do it.’ And when you’re a large incumbent, you can’t take those type of risks.”
The ones who are going to come up with solutions are not necessarily the biggest companies, who already have a place in the way things are, Lien noted.
“Everyone that has been in the gambling industry in the last decade has experienced the banking challenges, the transacting of money challenges, and this is same, same but different. It needs solutions, and you can’t expect the likes of Betson, or 365, or Pokerstars to take tremendous risk for, in their world, very little gain. For us, it is very different. It is very little risk but tremendous gain, because of the size and scale, and lack of legacy issues, lack of legacy tech, lack of legacy payment providers, banks. Our infrastructure will be geared towards solving that challenge, which is a very, very difficult challenge to reverse engineer,” Lien said.
What will it take to get past these hurdles to adoption? At what point do banks open their arms, or could be done without?
“When this industry decides on uniform standards,” Lien said. “There is scope for the industry, for instance, to have a coin that is fully AML-compliant, where the operator or some nonprofit has a full understanding of where that coin has been ever since it left the traditional banking system. If we could find a way to integrate or to have the knowledge of who owns the coin, ‘Where has that coin been, is it associated with terrorist financing? Probably not.’ But these are the things that the banks are very, very concerned about. And I think we, as an industry, need to do this together, if we’re going to get the larger operators to get into the adoption stage.”