Jez San, who founded PKR.com, the innovative 3D poker site which flourished in the poker boom years of the mid-to-late 2000s, is now turning his attention to blockchain technology in his bid to do to online casinos what Uber did for urban transport.
The new venture, called FunFair, is based on Ethereum, which, like Bitcoin, is a blockchain-based platform. But the difference with Ethereum is the far superior ability to create software for it, something which is prohibitively difficult with Bitcoin.
Like Bitcoin, Ethereum is decentralized and fully auditable, so basing online casinos on it will mean all of the games and gameplay are guaranteed be free from any tampering or cheating – or being ‘provably fair’ as the blockchain term goes.
Jez told Casinopedia: “What this allows us to do is make casino games that are fair, that allow us to be transparent, which has never been possible before on any system.”
The plan is to make FunFair the platform on which a potentially limitless number of online casinos are based. FunFair provides the ‘back-end’ tech, the games and the innovations from which casino operators can launch online casinos.
This is exactly what the likes of Playtech and Microgaming offer now in the ‘regular’ online casino world.
So, in other words, FunFair wants to be the ‘Playtech’ of blockchain casinos, rather than operate any casinos itself.
How will FunFair disrupt the industry?
Trust, or rather a lack of it, in the prevailing market, is key to FunFair’s leverage.
Even in a highly regulated, rigorously tested jurisdiction like the UK, how can players really be sure that the slot they are spinning is 100% fair, that their deposits are placed somewhere safe, or that their hand of blackjack hasn’t been tampered with in some way?
While the UK, as Jez himself agrees, is one of the safest places to play online casinos anywhere, one only needs to scan a few online forums to find plenty of doubt and disgruntlement among players about fairness.
And thats before dipping into ‘grey markets’ like the USA, or nations without regulators or clear legal frameworks.
And so that’s where Ethereum comes in. It offers that reassurance and protection to players. Games would be played within ‘smart contracts’ – a key feature of the technology – which, in short, allows for transparent, non-corruptible gameplay. Ethereum, like bitcoin, is also a cryptocurrency, offering the same blockchain safeguards, and it is this cryptocurrency that would be wagered during player sessions.
Jez, who first made his name making video games, including famously Star Fox on the SNES, said: “Having worked in the casino business I believe most casinos are trustworthy, but some people don’t believe that. It (unscrupulous practices) does happen, but it is mainly in people’s minds.
“We’ve created a technology that makes Ethereum work, that makes the games fun and fast. And so the games are completely transparent, not just the random number generator, but the entire gameplay is made inside a smart contract, so everything the game does is open to scrutiny.
“The leaps that we have made not only in transparency but also the cost of deployment means operators will have better margins with these games and they can pass on those margins to players as a better deal so the players could win more, have more bonuses or free spins – the players are going to have a commercially better game.”
The cost of transactions on Ethereum, known as ‘gas’ has also been reduced by FunFair, meaning the operating costs for online casinos on this platform are now at a competitive level.
Has FunFair got the resource to really shake up online casinos?
What FunFair is doing is not entirely without precedent. DAO.casino is another competitor in the marketplace, with a similar aspiration.
But Jez thinks his venture is much further down the track of development than his rivals. One key element is the speed of games. The problem with Ethereum is games based purely on the blockchain have so far proved to be painfully slow – to the point of unplayability, according to Jez.
A special innovation, called Fate Channels, essentially sets up a sort of cache which allows the games to be played at “superfast speed”.
But is there the resource to develop the platform further?
FunFair tested this with its first fundraiser, called a pre-sale token event, on June 22 – with Jez expecting to raise between $5-10 million. The actual total was $26 million, with a second round coming in a few months, with tens of millions more expected to be raised.
As Jez explains: “This is the crypto market reinvesting in itself. They have seen massive gains in their own wealth and they reinvesting back into other ventures. They see that as parlaying and rolling over their profits.”
The investment will allow FunFair to invest “millions” in making games.
Will the games be any good?
Microgaming, Playtech, NetEnt and other major players put in serious money making their games as good as they can be. Big ticket titles, like the officially licensed Jurassic World released by Microgaming this summer, cost huge amounts to release.
If FunFair truly wants to shake up the market – won’t it have to compete with these giants?
Jez said: “We just raised $26 million last week, so we will be able to spend millions – and that’s only our first round. We’ve got a second round in a few months and I don’t know exactly how much we will raise but it could be another $50-100 million, so we’re not going to have a cash reason why we can’t invest in the games.”
Jez’s team have a video game heritage, so he feels the skills are there too.
Below is a promotional video of a prototype FunFair slot game.
“We are very much from a gaming point of view and always have been, even from our previous product PKR, you can clearly see its heritage from computer games and not the online gaming industry. We are all about fun, beautiful graphics.”
“The prototype games we have up there are perfectly decent but we know they need to be a lot better to compete head on with the other existing products – and they will do.”
The grey market issue
Perhaps one of the biggest, and most tantalizing opportunities for FunFair, is the grey market. Currently, those playing in unregulated jurisdictions have to take their chances with, sometimes, fly-by-night operations.
Jez explained that territories, and it’s hard to overlook the USA, will be attracted to this casino platform due to the trustworthiness it can guarantee.
He said: “We will operate in regulated and unregulated jurisdictions. Especially in a place where there are unregulated casinos, there’s a higher chance the player will get screwed.
“If those unregulated casinos use our technology instead of whatever else they’re doing we think the players are much better off. There’s as big an opportunity in the unregulated places as there is in the regulated places.”
FunFair has released a few prototype games, demonstrating at an early stage what the technology can do. As early as by the end of 2017, the expectation is for games to be licensed to operators.
“The other part of the puzzle is encouraging other developers to develop games on that platform,” said Jez.
“In a year or two’s time we don’t think we will even the majority supplier of our games. We think there will be a big ecosystem of games suppliers on our platform.”
And perhaps, most boldly, Jez claims that online casinos have barely touched the casino market as a whole, and there’s a lot further it could go.
“Personally I believe that online hasn’t made a dent in the casino market,” he said.
“Online may be worth $40 billion, but land based is worth over $300 billion dollars.
“If you look at any other land-based sector and see how it has been disrupted by online, whether its taxis and Uber or retail and Amazon you name it – online usually interrupts land-based incredibly well, and yet in casino it hasn’t, and it hasn’t for multiple reasons, including regulation and monopolies and unfair business practices.
“So, with a better product that eliminates the trust problem for players and also to improve the transparency of everything, we think the whole online gaming market will grow and eat into the land-based market more than it does.”
Can it work? Of course it can – Jez San and his team have proven time and again that they can break the mould.
One big selling point is the trust factor – that this platform offers whiter-than-white gameplay. And while that is undoubtably great for players – to what extent are existing online casino fans disgruntled enough to make the swap?
And then, of course, there is the mass-adoption question. Will Ethereum become a household name in the same way that Uber and Amazon now are? That’s something beyond FunFair’s control.
What is clear is that Bitcoin has already made significant inroads into online casino, and if Ethereum and FunFair can get around Bitcoin’s many shortcomings in terms of player offering, we could be looking at online casino 2.0 – in other words, a real revolution in the sector.
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