Proprietary Ecosystems and Loyalty Tokens in Casinos: Features

Specialists from Casino Market talk about internal economic spaces and the nuances of their work. We will explain why such projects are beneficial for operators and what future awaits them.

In-House Business Environment

This is an internal financial system of an entrepreneur, which includes branded currencies, loyalty tokens, and mechanisms of interacting with consumers. It allows owners of digital platforms to manage payments, bonuses, and the game economy without depending on third-party providers.

Key Features of the Service

What such closed spaces consist of:

1. Internal tokens. This is a virtual currency (coins, tokens, and credits), NFTs, or blockchain-based assets.
2. Loyalty programs. Participants can earn reward points, cashback, VIP levels, and other privileges.
3. Sharing economy. Players can buy, exchange, and withdraw tokens.
4. Game mechanics. Entertainment sites can be supplemented with multi-user activities. These are tournaments, quests, missions, quizzes, and other formats with flexible incentive systems.

Which Loyalty Points Should be Used

The introduction of various types of assets (virtual, blockchain, and non-fungible tokens) creates a flexible and effective financial model in casinos.

The most popular solutions in the industry include:

1. Virtual coins. They are used only within the platform to place bids, pay for purchases, and receive bonuses. As a rule, such tokens do not have a direct value outside the entertainment resource.
2. Cryptocurrency. These are ERC-20, BEP-20, etc. They can be traded on exchanges or used outside the portal. Such funds provide flexibility in regulating the cost. Most often, emission, staking, and other tools are applied.
3. NFT tokens. Unique crypto assets are presented in the form of avatars, game items, artefacts, or VIP levels. They are designed for trading, transferring to other customers, or using within the ecosystem.
4. Reward points. They are granted for activity (bets, deposits, and participation in contests) and can be exchanged for fiat money, free spins, or bids.

Besides, bonuses are often applied in VIP offers to increase the status of casino visitors.

Advantages of Economic Spaces

Today, entertainment project owners are increasingly creating proprietary ecosystems with in-game currencies, tokens, and full-fledged blockchain solutions. Thanks to this, entrepreneurs can manage funds, reduce dependence on third-party services, improve user experience, and much more.

Key benefits of such a digital environment include:

Control of Financial Flows

The launch of unique business spaces provides greater manoeuvrability:

1. Independence from banks and payment providers. Many companies face problems with account blocking and restrictions on transfers in selected countries. A proprietary ecosystem solves this issue since all transactions take place within the platform.
2. Flexibility in liquidity management. Operators can control the turnover of in-game assets and limit or stimulate their withdrawal, thus creating a more sustainable business model.
3. Optimisation of expenses. One of the sources of savings is the reduction of fees. Traditional payment services (Visa, MasterCard, and PayPal) can additionally charge 2–5% of the amount of each transaction. Using an internal currency allows brands to significantly reduce these costs, and sometimes eliminate them completely.

Increased Engagement

Ecosystems with tokens and points contribute to greater audience retention:

1. Unique loyalty programs. A proprietary currency makes it possible to develop complex bonus systems. This is an increase in the customer’s status depending on the size of their bet, receipt of in-game items in exchange for collected points, cashback accrued in tokens, and other solutions.
2. Gamification of economic processes. Users can earn internal funds not only through bids but also by passing quests, participating in contests, and completing various tasks. This increases audience engagement and keeps people interested for a long time.
3. Socialisation. If the in-app currency or assets have value and can be sold or bought within the casino site, then clients begin to interact with each other. They share experiences, exchange accumulated points, and participate in joint missions.

Emission and Rate Management

Operators can regulate the cost of the digital portal’s proprietary funds:

• link the denomination to fiat money (e.g. a token is equal to $1);
• set a free-floating rate (if the currency is traded on the stock market);
• provide a dynamic change in value depending on supply and demand.

Entrepreneurs can control inflation through token-burning mechanisms (for example, part of the commission is sent to the “blacklist”) or the launch of new coins. The second option is suitable if the economy requires a larger turnover of funds.

Building Trusting Relationships

If the internal economy is based on blockchain technology, this gives project owners several important advantages:

• Transparency. Clients can see the history of all transactions, which increases their trust in an iGaming portal.
• Moving away from centralised control. If the system works on smart contracts, users will be sure that their finances are protected from manipulation by the operator.
• Security. Distributed ledger reduces the likelihood of fraud from third parties.

Expansion of the Audience and Access to New Markets

The decision to launch a proprietary ecosystem helps perform several tasks:

1. Bypass regulatory restrictions. In many states, betting is strictly controlled, and bank payments can be blocked. Using in-game currency or digital assets allows people to find a way to circumvent such limitations without violating the law.
2. Integrate the platform with DeFi and Web3. This allows operators to organise token staking or improve liquidity through pools on decentralised exchanges. All this increases the entertainment company’s profitability.
3. Find new monetisation channels. Entrepreneurs can not only earn on bets but also generate revenues from fees for exchanging coins, selling unique internal assets, and placing ads.

Difficulties in Managing Ecosystems

Without a well-thought-out strategy, there is a risk of decreasing the audience’s trust and having regulatory issues. Linking to the value of fiat money and controlling inflation helps businessmen to achieve success.

Let us consider what pitfalls casino owners may face:

1. Reference to the real exchange rate. If the in-game currency is not linked to cash, its rate can fluctuate greatly. This causes distrust among consumers and negatively affects the liquidity of the entertainment project. Alternatively, it is possible to establish a strict peg to the dollar, euro, or any other stable unit.
2. Liquidity support. It is important for operators to ensure a sufficient amount of reserves so that players can freely exchange their in-game tokens for fiat money. Otherwise, it can lead to a loss of credibility and mass withdrawal of funds.
3. Regulatory risks. Many jurisdictions regard digital tokens as securities or electronic assets, which leads to additional legal requirements. In some countries, they may be prohibited due to the possible use for money laundering, and this point is worth considering.
4. Inflation. Without emission monitoring mechanisms, the in-game currency can quickly depreciate, which will lead to an outflow of the audience. Therefore, it is necessary to implement inflation control algorithms: a dynamic shift in rates, token “burning”, etc.
5. Loss of customer confidence. Online casino visitors may fear that internal coins will have no real value. The solution to this problem will be an accessible exchange for fiat money and the use of blockchain for the transparency of transactions.

Trends and Current Technologies

Proprietary economic systems have gone from simple bonus programs to complex business models with tokens and NFTs.

In the future, the entertainment industry will continue to move towards complete decentralisation, integration with the metaverse, and widespread use of AI. This will give people greater freedom of action and entrepreneurs — new ways of monetisation and control.

Let us consider the latest trends in the niche:

1. Devolution. Digital casinos may soon switch to autonomous community management (DAO model), where customers will make key decisions. Concurrently, the popularity of DeFi mechanics will grow with the generation of revenues from staking and mining in-game tokens.
2. Integration with traditional fintech solutions. Banks and large financial corporations can start collaborating with entertainment sites, recognising their digital assets. Another option is the development of hybrid systems (fiat + crypto). Such iGaming projects support both fiat money and cryptocurrency, attracting a huge audience.
3. The application of AI. Artificial intelligence will be able to automatically balance the market, preventing inflation and liquidity shortages. Among the tool’s advantages, we can also highlight the analysis of user behaviour and the creation of personalised bonuses.
4. Integration with the metaverse. It will allow entrepreneurs to buy virtual real estate for loyalty points, participate in eSports bets, accumulate NFTs, and much more.

The Main Things about Internal Business Spaces in Casinos

They became an extremely important stage in the development of the industry.

Aspects that should be taken into account:

• The described digital environment gives operators more control, reduces costs, increases audience engagement, and opens up new sources of monetisation. Their success depends on reasonable management of liquidity, exchange rates, and customer retention mechanics.
• The future of internal ecosystems is associated with decentralisation, artificial intelligence, and the metaverse. Integration with traditional fintech solutions will be extremely beneficial as well.

Casino Market offers such services as the launch of turnkey platforms, business creation under the White Label scheme, sportsbook software installation, and much more.

You can also order the connection of administrative program components and assistance in promoting already implemented iGaming projects.

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James Burton The Casino Market partner, the owner of the gambling establishments’ network

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