Provably Fair Cryptographic Technology as a Trust Factor in iGaming

Among other factors that mattered to players were: 

• whether the brand encourages responsible gaming (84%); 
• how the brand behaves towards the gaming community (66%); 
• the transparency of the system of benefits and odds (76%).  

While social communication and support of Responsible Gambling initiatives are mostly about PR and marketing, the transparency of the gaming process itself is performed on a technical level. Blockchain technology brought this process to a completely different scale thanks to Provably Fair technology.  

“There are different categories of players. For some, contact with an iGaming brand can be a one-off event, while for others, gambling can be a source of income or a good way to spend time. Speaking of the first type of users, the question of whether the platform has a license is far from being of paramount importance. When it comes to the second and third groups of players, it’s certainly important for them to be sure of the quality of what they’re paying money for,” comments Ivan Muller, CMO of Dexsport. “Sometimes the user makes a bet for a large amount and wins something, but the full prize is never paid. Given such cases, of course, it’s crucial for the user that the platform is licensed. It should be noted that the license alone doesn’t guarantee the iGaming brand’s quality. When choosing a platform, players also rely on other aspects that match their preferences: bonuses and their terms, the quality of support in communities and on the platform, promotions held by the company, and the variety of entertainment.”

Provably Fair: What Is It? 

Provably Fair is a provable fairness technology based on cryptography that ensures that online casinos play fairly. The prototype technology emerged in 2011 and began to be also used to verify the algorithms of online bookmakers and digital lotteries. 

Notably, Provably Fair only provides a guarantee of honesty on the part of the iGaming platform. However, this technology doesn’t affect the security of the service code and the funds players place as deposits. Accordingly, third-party security audits are also an important factor of trust on the part of players. 

How Provably Fair Technology Works

Provably Fair operates on the basis of the SHA-256 encryption algorithm. For clarity: a similar technology is used on the Bitcoin blockchain network. The Provably Fair algorithm assumes that the casino can’t influence the outcome of the game because, at the time of betting, it has already been determined. 

Provably Fair relies on three main variables:

1. Server Seed, a number randomly generated by the online platform. Prior to placing a bet, the player has only access to the hash of that number, i.e., a short representation of that value, a result of encryption by the SHA-256 algorithm. 
2. Client Seed, a random number generated by the user until the moment when the bet is made. 
3. A cryptographic value that increases with each bet. When the Server Seed value is zeroed, it also goes to zero. 

If the outcome of the game requires the processing of a large number of values, such as in the case of slots, then additional variables can be introduced into the process, but the point remains the same. 

In practice, it looks like this: 

1. The iGaming platform uses a random number generator to create a value that is hashed and transmitted to the player before a specific bet is made. This is a Server Seed. 
2. The client browser randomly creates an initial number that is then hashed and used by the platform during bet processing. This is a Client Seed. 
3. The user receives an unencrypted version of the Client Seed, which allows them to decrypt the betting data generated at the time of making a bet by checking the game results.  

Platforms supporting Provably Fair place the betting validator directly in the user interface so that the process of fairness verification takes no more than ten seconds. In practice, the validation process consists of deciphering a hashed value that matches the initial value, indicating that the platform is fair. In case any algorithm changes the outcome of the bet already after it was made, the user would get a different outcome from the initial one when decrypting the result. 

Provably Fair in Sports Betting 

While this technology is also widely used in online lotteries, the Provably Fair algorithm described above doesn’t apply to online sports betting platforms. The thing is that at the time of betting, the event’s outcome is not yet predetermined.  

So, by “provably fair” in the betting industry, other possibilities are usually meant:    

1. The use of smart contracts, which fully automates the process of taking bets and paying out winnings. 
2. The open code of smart contracts, which allows you to verify the correspondence of the declared and actual betting conditions. 
3. Immutability. This feature of cryptocurrencies eliminates the possibility of post-facto manipulation of bets or smart contracts.

“In the face of many scams in sports betting, decentralized betting, which excludes traditional bookmakers, is becoming very popular. Such a betting platform is based on an open-source model that involves blockchain. This makes the process of receiving bets and winning payouts automated, so there’s no possibility of cheating on the part of the platform at all. I think that in the near future, decentralization will be among the main criteria for choosing a platform for players,” shared his opinion Ivan Muller, CMO of the decentralized betting platform Dexsport.

Blockchain and Provably Fair are thus qualitatively reshaping the iGaming field, making it more transparent, trustworthy, and generally more user-friendly.