The future of online gambling could depend on provably fair gaming

August 14, 2021

Provably fair gaming is the next big thing in online gambling, and it is set to be an innovation that will ensure trust and reliability for online casinos, with the use of math and algorithms to provide fair gambling outcomes.

This will be extremely important for an industry that is likely to reach nearly $90 billion globally by 2024, and therefore the trust of its customers will be vital if it is to survive and thrive.

One of the biggest issues that gambling customers have is the potential for fraud or for being cheated by the casino. Players need to be confident that they have a fair shot at winning before they will place their bets on any casino game.

Over 180 million Americans play the lottery each year, despite knowing that their chances of winning are tiny, and this amounts to annual ticket sales of over $70 billion.

The reason why people buy these tickets is that they know that the process is fair and that they have as good a chance as anybody else. This is the biggest factor in terms of customer retention and support in the gambling industry, and it is therefore essential that online gambling companies are able to provide satisfactory outcomes to their customers. Provably fair algorithms are the way forward for this industry.

The basic premise of these algorithms is that players’ bets or betting conditions cannot be changed after the bet has been placed and that players will be notified immediately if there is any fraud against them.

The algorithm through which a game’s outcome is determined will not be secret so that players can see the process and understand that a fair outcome was delivered, even if it was not favourable for them.

One of the best examples to explain this is through the following game – suppose a game where the player needs to pick a number, followed by the casino. If the sum of the two numbers is even, the player wins, and if it is odd, the casino wins. Now, the fact that the casino picks its number after the player could lead to a lot of suspicion, as a fraudulent operator could very well see the player’s pick and then choose a number that would allow it to win.

However, in a provably fair system, the casino will pick its number before the player, encrypt it, and send it to the system. Thus, the number is already locked with no possibility of being changed, and once the player picks a number as well, the casino then sends the decryption key to the system to unlock its own pick and reveal the winner.

This is different from the concept of the House Edge, which is that the casino will have a little bit of an advantage over players. However, this is true of land-based casinos as well and has been the case since the inception of gambling.

Players accept this, as ‘fairness’ in this context does not mean an even playing field, but a ‘fair’ chance at winning, rather than the outcomes being manipulated to suit the casino. The history of gambling and casinos is littered with examples of accusations of rigged games and impossible odds, with the alleged involvement of gangsters adding to the mix.

However, these questions are now being resolved online, and the provably fair gambling algorithms will go a big way towards solving these problems. Based on the SHA-2 hashing algorithm, cryptographic numbers and outcomes are generated during gameplay to prove that outcomes and choices have not been tampered with, and that there is only ‘one-way’ decryption of data.

Casinos that support provably fair technology, and make its inclusion visible to players, have a decided advantage over legacy platforms, showcasing a commitment to openness and honesty.

However, there are still many slot games, live casinos, and table games that would not qualify as provably fair, and this shows just how much work needs to be done in this regard before we can say that the industry as a whole has moved towards being fair and just to its customers and players.