For Cyrus Naini, CEO of igaming software provider Green Brick Labs (GBL), the primary benefit cryptocurrency and blockchain poses for betting operators and their customers is increased transparency, but there are still hurdles to overcome in overcoming consumer and regulatory uncertainties about the emerging sector.

Payment Expert – Could you tell us a little about Green Brick Labs and what you set out to do as a company?

Cyrus Naini – Green Brick Labs has been around since 2014, and its claim to fame was it was one of the first online sports betting and casino applications that used only cryptocurrency as a form of payment. The originating operator which used our application is still running today, and continues to only offer its clients crypto as a method for deposits and withdrawals.

PE – So you’ve really been at the forefront of seeing the crypto sports betting and crypto casino spaces develop in recent years?

CN – That’s right, we’ve seen it move from a very niche market where you would typically only have a more technically savvy gambler who was more inclined to use crypto as a payment solution due to its novelty, to now what is considered mainstream adoption.

Over the 12-18 months, we’ve seen Bitcoin move from what was previously a transaction based currency, to one more geared towards investments. Clients are now seeking to expand their crypto offering to users by providing them with the ability to play in ERC-20 tokens, such as Etherium. The growth in demand for additional currencies has certainly been notable, and only continues to grow. 

PE – One of the most commonly cited benefits of crypto as a payment method is its transparency. Can you give us more details about how the transparency of blockchain can improve the player journey when it comes to gaming and betting?

CN – When we talk to clients who approach us about integrating Bitcoin or any form of cryptocurrency into their platform, they are often surprised to learn that there is far more transparency in the world of crypto over Fiat. This is a result of the blockchain itself and companies helping operators make sense of the data. The ease with which they can see where user’s funds have come from before being spent on their site, is something they truly appreciate.

For operators, there’s a level of trust in terms of knowing where a user’s coin has been, especially if it has been used by a nefarious source. If you look at our work with Isle of Man-regulated companies such as Maverick, operators have to prove that they have done due diligence in their transactions, and we can work with some third party firms – depending on the operator – to see if funds have been used in the dark web, for money laundering, or any other purpose.

We can also see if the transaction has come from an unreputable exchange or one which is listed as high risk, which is something incredibly challenging and time consuming in the world of Fiat. By being built on a blockchain, there is a decentralised leger which allows everyone access to information. The closest you can get to this level of control in the world of Fiat is a Payment Service Provider (PSP), having the ability to inform operators that a user has been banned from their site. This is done on an individual PSP level, with little to no explanation for the ban – meaning there is far more transparency in the crypto side for us, operators and even the user.

PE – Crypto has been accepted as a payment method by prominent platforms such as PayPal, but many major betting operators seem to be reluctant. What do you think can be done to encourage these firms to leverage crypto and other digital currencies?

That’s also an interesting question because a lot of these companies started jumping on to the cryptocurrency side of things as there is obviously a market for it. There is certainly a user base for them which is asking for the functionality, while also helping evolve their brand to be more innovative; however it should be cautioned that many of these first continue to hold a negative perception toward the gaming space. That’s why GBL works with operators in the regulated gaming markets; offering a bespoke solution. We aren’t governed by a large corporate board of directors and investor groups who can at any moment issue a sweeping edict shutting down any gaming operations they feel don’t meet their corporate agenda. We’ve seen this time and time again in the world of Fiat, which has ironically become the key driver for crypto.

My recommendation for companies like PayPal would be to continue what they’re doing – focusing more on the application of crypto for ecommerce. It will inevitably take a little longer for the mainstream to feel comfortable using crypto for payments; however products such as GBL Pay allow more bespoke payment solutions to innovate far faster, by working in industries always looking to leapfrog, such as gambling. This creates the fully defined adoption lifecycle, which allows GBL Pay to introduce and market-test features such as 0-based confirmations for instant deposits. As gaming operators and their clients validate the technology, the prominent platforms can learn from our findings, helping distil the next must-have functionality for mainstream adoption of crypto as a payment method. 

PE – Do you foresee an uptake in firms offering betting services in both fiat and cryptocurrency, or an increase in companies offering wholly crypto-based services?

Certainly the latter from what I can see. What we’re seeing is a lot of the sportsbooks reaching out and asking how they can accept crypto in addition to their existing fiat solutions. Using GBL Pay allows these operators to merge both their existing PSPs, and our crypto engine into a single payment solution designed to meet any operator’s needs.  As operators begin allowing users to play in crypto, they are slowly by surely seeing the benefits of focusing more on crypto – moving away from an older more cumbersome fiat solution which often includes much higher fees for the users. 

In previous years, we’ve had operators ask us to shut down certain Fiat payment providers on their sites, as their fees or ever growing list of operating business requirements starts to act as more of a liability for their business. GBL Pay allows operators to simply integrate our payment API into their application, knowing that our product meets regulatory requirements and provides access to all pertinent information. Rather than having the operator lose focus on business regulations, we allow them to focus on their users and operations. 

PE – Although it is becoming increasingly mainstream, crypto is also attracting regulatory attention from bodies such as the UK’s FCA and the Canadian Securities Administrators (CSA). As the betting and gaming industry is also a highly regulated sector, could this increasing oversight pose a major hurdle to increasing engagement between the two?

I see this as being two fold. I think the increased oversight is building more confidence and trust in the system for operators and end-users of these gaming platforms. In speaking with operators who function in the “grey-market” (that is to say, unregulated jurisdictions), they indicate that though not required to follow the regulations, they are now starting to adopt some of their best practices to provide their users with a level of trust. The vast majority of users want to know that they’re playing on a safe and reputable site that has some form of best practices always in play. 

At the same time, there are markets such as the Isle of Man, or even more so – Malta, which have and continue to act as a barrier to operators seeking to move into a regulated jurisdiction. Oftentimes, operators have shied away from moving to these jurisdictions, simply as a result of some incredibly complex requirements deemed necessary for compliance. Going back to your question on transparency, – there is a stigma associated with cryptocurrency which is not one-to-one with the capabilities of cryptocurrency. If you follow what the regulators are looking for in their compliance measures, you’ll actually see that it’s far safer in my opinion to start accepting cryptocurrency over fiat.

I think we’re slowly getting to the point where it’s becoming more mainstream and that stigma is starting to be challenged, but overall I think these regulations are making it more difficult for operators to get to where they want to be in order to better cater to their users. 

So would you say that focusing on education and awareness is important for greater acceptance of crypto and blockchain as a payment method both in the gaming industry and in other sectors?

Absolutely, and this is something that we actively do at GBL, in Canada, the Isle of Man, and anywhere our operators are based. We have been, and will continue, to work with jurisdictions who are interested in allowing operators to use crypto as a form of payment, helping educate them on the more granular details of the technology. We were one of the first crypto-based payment providers in the Isle of Man, and had the benefit of working with the regulators to help define their requirements to ensure a secure gaming environment for operators and players. 

It’s a case of breaking down the stigma, but I think there is a positive movement being made for people to understand the transparency and security of cryptocurrency transactions once regulated. We’re hoping to push this process faster, help our operators move forward, and give users the service they are asking for.