From the Rumor Mill – Vegas set to launch Bitcoin slot machines this year

From the Rumor Mill – Vegas set to launch Bitcoin slot machines this year

Slots machines based on cryptocurrency have been in the works for some time and rumor has it that they will be available in Las Vegas in 2021.

In January, International Game Technology, PLC (IGT), got a patent to allow for the use of Bitcoin and other cryptocurrencies in slot machines. The patent was filed and awarded by the U.S. Patent and Trademark Office.

The illustrations in the IGT patent show that players would have two digital wallets. One would be their cryptocurrency wallet, whether kept on the phone or at an exchange like Kraken, and the other would be a digital casino wallet, set up by the casino and likely connected to their player’s card. The casino digital wallet would contain both fiat currency and cryptocurrency. IGT’s technology would allow players to transfer from their cryptocurrency wallet to the casino digital wallet for use at slot machines, but presumably could also be used at some point for table games and sports betting. The illustrations in the patent show that the only cryptocurrency that can currently be used is Bitcoin (BTC), Bitcoin Cash (BCH) and Ethereum (ETH), but no doubt that could be extended to other popular currencies like Litecoin or BSV easily. It’s doubtful that casinos or IGT would be interested in cryptocurrencies like DOGE, which are extremely volatile and subject to wild daily price fluctuations.

How to play with crypto

The player would scan a QR code from their phones which would pull up their cryptocurrency wallet and crypto can then be transferred to the player’s casino wallet. That crypto can then be transferred from the player’s wallet to the casino’s digital account to play games. The amount taken out can be determined by the player. So, if a player wants to play at a certain machine, for example, it will ask the player how much money they want to play at the machine and then it would deduct the appropriate amount of crypto from the player’s casino wallet and put in the corresponding fiat equivalence in the machine. So, for example, if a player has say 0.5 BTC in their digital casino wallet, which is worth $25,000 and they only want to put $500 into a specific machine, the machine would deduct 0.01 BTC from the player’s wallet (along with a small transaction fee). It would then be designated to that machine and the player’s wallet would then show 0.49 BTC, less the transaction fee, left in the digital casino wallet account and $500 would show up on the machine.

There is no real indication of how the player would get money back into their accounts, although one would assume it would be done by way of another scan and the casino can keep track of any winnings to allow the casino to send a W -2G tax form to the American player’s address and the IRS. In countries where winners don’t pay taxes on gambling winnings, this wouldn’t be a concern. Upon announcing the patent, IGT also mentioned that they received approval by the Nevada Gaming Control Board for cashless wagering.

Casinos are apparently very excited about this opportunity because traffic in Nevada casinos has been extremely high of late, and casinos noticed that most of the slot machine play has been from millennials, as well as 21 to 30 year-olds. This is the also age group that is most comfortable using digital currencies and would prefer not to use physical cash if possible. Studies show that many in this age group have a lot of cryptocurrency waiting to be used on something.

Roll out?

Since that announcement nothing has really been mentioned about the product progress, but sources close to the company have told me that they are almost ready to roll out their first machines. The big problem for IGT right now is that there are still some questions over the legality of using cryptocurrency for cash-based transactions in some states, plus it’s uncertain which casinos, if any, are ready to roll the dice and test it out. The large daily fluctuations of late in cryptocurrency prices are also a concern for some casinos, although casinos are also aware that digital currency is the wave of the future. One source told me that IGT could be ready to have the first machine on Las Vegas casino floors by Labor Day, although a more realistic target date is Thanksgiving.

Global Reach

IGT’s patent only applies to the U.S., but they are trying to patent it elsewhere. One of the big drawbacks is that many countries have made transacting with cryptocurrency illegal. In Russia, China, Vietnam and South American countries like Bolivia, Columbia and Ecuador, the use of cryptocurrency is illegal per their laws. And it is expected that countries like Singapore, Malaysia, the Philippines as well as some European countries, may follow suit. Canada has taken no stance on cryptocurrency, although most Canadian banks won’t process transactions to purchase cryptocurrency. But even in these instances the IGT patent could prove valuable. While a lot of countries may be looking at banning cryptocurrency, they are fully on board with creating central bank currencies (and some already have), and the IGT technology could easily be applied to central bank digital currency along with more mainstream cryptocurrencies.

No doubt IGT wants this technology patented everywhere a.s.a.p. because other slot machine makers like SG Digital, Aristocrat and Konami are likely not far behind. Scientific Games in particular is very aggressive, and no doubt would prefer to create their own product that has enough differences to avoid violating IGT’s patent. But, if IGT gets a big head start, the other slot machine makers may have no option but to license the technology from IGT . . . at a cost.

So, if rumors are correct, look for IGT slot machines with the option of using Bitcoin and other cryptocurrencies to be available on Nevada casino floors shortly. If they proves successful, then it’s almost certain that IGT will start asking other state gambling boards to approve their machines and wallets as well. This could indeed be a game changer, pardon the pun.

Read insights from Hartley Henderson every week here at OSGA and check out Hartley’s RUMOR MILL!

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