Everything You Need to Know About Peer-To-Peer Gambling

By Jane Shaw Senior Editor Updated: 04/05/2024

Jane Shaw Senior Editor See Full Bio

We count on Jane to inform our readers about the latest slot games in the US market. With her passion for video games and a degree in engineering, she’s our gambling tech expert. Jane’s also active in our blog section, where she tackles the curiosities and changes in the industry.

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Peer-To-Peer Gambling

• What is a Peer-to-Peer Casino?
• Peer-to-Peer Poker: An Introduction
• Evolving P2P Gambling Technology
• Legal Landscape of P2P Bets
• Social Impact of P2P Gambling
• Future of P2P Betting

Peer-to-peer (P2P) gambling has been around for almost two decades, but it’s only recently starting to gain traction outside of the sports betting world.

So, what is peer-to-peer gambling? Well, essentially, it removes third-party intermediaries like traditional bookmakers or casinos, allowing players to wager against one another. This allows players to take the house’s role, setting their own prices, odds, and payouts.

This blog aims to examine what peer-to-peer casino games, peer-to-peer poker, and sports betting look like today – and what the future holds!

What Is A Peer-To-Peer Casino?

A peer-to-peer casino connects players directly to gamble against one another in a variety of games without requiring an intermediary like a traditional gambling establishment or online operator. Instead, players use decentralized platforms to not only play casino-style games but also set betting terms, manage game rules, and customize various aspects.

Often integrating blockchain technology and cryptocurrency systems, peer-to-peer casinos aim to provide transparent casino games that, in most cases, are provably fair. This means the results of any games can be verified on the blockchain. By eliminating third parties like casinos, the overhead costs are lowered. This allows for better odds, larger payouts, and lower house edges.

Early P2P betting focused more on sportsbook models, but in recent years, it’s started to make its way to the casino gaming world. From classic table games to slots, poker, bingo and more, peer-to-peer casino games are proving popular. The only downside, really, at the time of writing, is the fact that the technology isn’t as user friendly as it needs to be to capture widespread appeal.

You won’t find any mainstream casino apps offering peer-to-peer casino games yet – but as the technology continues improving, peer-to-peer gambling apps might well launch in the future.

Peer-To-Peer Poker: An Introduction

Of all the gambling types, poker has emerged as one of the most suitable formats for peer-to-peer betting models. Requiring substantial skill alongside chance factors, poker avoids legal classification as pure gambling – thereby circumventing restrictions facing pure-luck games like video slots and casino table games.

Peer-to-peer poker really started to take off back in 2020 as major firms Fold and Polker introduced real-money gaming to America – facilitated by decentralized tools enabling compliance checks. Providing programming interfaces for third-party developers, networks like Polker were able to be at the forefront of P2P poker – and they continue growing today.

But how do they work – and what’s the benefit? Well, by removing the typical poker room’s overhead costs, P2P networks return much greater profits to winners – and this is thanks to a significant reduction in rakeback or buy-in fees. Plus, players can access their winnings often immediately, thanks to blockchain technology.

While cheating risks haven’t yet been 100% ironed out, the general transparency about card shuffling and game rules allow for, generally, much better “fair game” procedures than conventional poker software. It’s also worth pointing out that these P2P poker games are, usually, much more accessible – and this makes them ideal for home game-style poker, that’s often hard to set up – or expensive – to run at conventional online poker sites.

Evolving P2P Gambling Technology

The origins of peer-to-peer gambling go back to Betfair’s pioneering exchange, which launched in 2000. By connecting bettors directly through an online marketplace, Betfair showed that the concept had merit – although one of the major issues with early markets was liquidity challenges; exchanges often struggled to get enough users involved, especially on lesser-known, less popular markets.

However, since the rise of smartphones and mobile sports betting apps, P2P platforms have been able to rely on new, state-of-the-art technology. One of the most significant technological advancements has been the centralized database being “pushed out” – with decentralized blockchain-based infrastructure taking over. This not only allows for greater levels of security, but it also enables much more transparent operations.

Integrating cryptocurrency wallets and leveraging tokens/coins for betting purposes, platforms like Wagerr and BetProtocol have eliminated slow payouts and removed the need for third-party financial institutions to handle payments. Some operators even offer a plug-and-play open API to help developers integrate peer-to-peer models into custom betting applications.

Various networks have also capitalized on increasing interest in daily fantasy sports, esports, and online poker – developing peer-to-peer exchange models with skilled player bases. Expanding beyond traditional pre-match sports odds, platforms are exploring in-play micro-betting for events like award shows and elections, too.

While early P2P networks required desktop access, mobile-centric UX design now provides on-the-go real-time betting with enhanced security. Login technology like biometrics and 2FA make it much harder for accounts to be hacked, and for funds to be drained.

With the online betting market expected to be worth a staggering $60 billion by 2027, it’s clear P2P betting has, at least, a shot at capitalizing on this – and with new technologies always emerging, it’s unlikely we’ll see an end to the innovation any time soon!

Legal Landscape of P2P Bets

The decentralized nature of peer-to-peer betting exchanges and casinos creates a complex regulatory world – for both operators and policymakers. Existing online gambling regulations are, generally, seen as unfit for purpose – as players and bettors can participate from all around the world, not just betting, but also laying.

Recognizing this challenge, some P2P platforms have chosen to base themselves in jurisdictions where regulators are clear. For example, in the United States – where online gambling has only recently begun to open up – early P2P gambling companies like ZenSports have focused on skill-based contests rather than pure games of chance. By classifying offerings under skill gaming provisions, networks can facilitate legal real-money play even across state lines.

Some international networks, like Wagerr operating from Costa Rica, target countries lacking clear internet gambling rules while restricting access from countries where it’s clearly illegal. Other peer-to-peer exchanges take hybrid regulatory approaches across different countries. So, as you can see, there’s far from an industry standard – yet.

Some countries like the United Kingdom have also set up specific P2P regulations. Just as crypto exchanges have started to cooperate with online gambling regulators, so must P2P gambling platforms if they want to avoid blanket bans on their services.

However, with peer-to-peer betting such a new “thing”, it remains to be seen how major online gambling regulators like the Malta Gaming Authority (MGA) and the United Kingdom Gambling Commission (UKGC) will adapt. Whether they will choose to outlaw P2P betting entirely – or whether they’ll allow it to continue operating in a somewhat gray area, remains to be seen.

There is also some confusion surrounding how P2P betting will tie in with taxation laws. Some countries, for example, separate games of chance (casino games and video slots) and skill-based games, like poker. This means that poker players often pay a different rate of tax than those who win on casino games. How P2P games will fit into this equation remains to be seen – and this is why the industry is, according to some analysts, getting ahead of itself; the regulatory frameworks need to catch up!

Social Impact of P2P Gambling

Beyond technical and economic advantage, peer-to-peer betting models do, admittedly, have some social implications – both good and bad. Firstly, by decentralizing the process of operating gambling away from what, historically, has been a small monopoly of companies, P2P gambling sites offer a far larger number of entrepreneurs and companies the ability to enter the market. However, with this comes a major downside; the ease of which rogue and fraudulent operators can set up shop.

Some rogue sites, for example, have been seen to offer unfair bonuses and promotions – the refer a friend bonus has proven to be particularly popular – and without any regulatory oversight, these operators have been attaching unfair terms and conditions that make it almost impossible for a player to profit.

However, the rise of P2P betting platforms – Lucra being a good example – also brings out a shift towards gamified, social betting experiences where individuals can place bets against friends or family members rather than against a traditional bookmaker. This approach not only makes the betting process for newcomers easier – by removing complex jargon and often poor odds – but also enhances the social aspect of sports betting. Some betting platforms even allow users to set up their own betting contests and competitions.

But as with all forms of gambling, it’s important for platforms to promote responsible betting and for users to engage with these services mindfully. Here’s a brief overview of some of the main benefits and risks of P2P betting services:

Future of P2P Betting

Looking ahead, trends point toward significant peer-to-peer gambling growth as platforms leverage blockchain tech, global connectivity, and decentralized finance (DeFi) tools which allow users from all around the world the chance to get involved. Peer-to-peer sports betting alone is expected to reach a $200 billion market cap by 2027, and as the momentum grows, it’s very likely that we’ll see more operators and platforms beginning to get on board with the concept.

Technology is also playing a big role in the growth of P2P betting. With smartphones and apps, betting has become something you can do anytime, anywhere. New apps are coming out that let you bet on almost anything, from big sports events to friendly games of chess. This means more people can join in the fun, even if they’ve never bet before.

Safety and fairness are other big focuses for the future of P2P betting. As more people start betting with each other, platforms are working hard to make sure everyone plays fair and that your money is safe. This includes checking who is betting and making sure no one is breaking the rules. However, concerns around underage gambling have arisen, and it remains to be seen as to how operators will deal with this.

The future will also see P2P betting becoming legal in more places. Right now, some jurisdictions simply don’t allow P2P betting, but that’s slowly changing. As laws catch up with technology, more people will be able to bet with each other legally – which, most argue, is good news for the online gambling industry.