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Despite the widespread use of anti-cheating tools like random number generators (RNGs) and AI-based fraud detection in online casinos, cheating and game manipulation remain persistent challenges.
In fact, between 2022 and 2024, fraud in the online gaming sector increased by an average of 64% year-over-year.
The above number alone shows that traditional gambling security measures have loopholes. As a result, many online casino operators are turning to blockchain technologies like smart contracts to tackle fraud on their platforms.
While the growing market size of smart contracts indicates broader acceptance across multiple sectors, some still question their efficacy and long-term usage in checkmating fraud in casino platforms.
Key Takeaways
- Cheating persists in online casinos despite anti-fraud measures, pushing casino operators toward smart contracts.
- Smart contracts ensure transparency by locking game rules on the blockchain.
- Both players and rogue casinos tend to cheat – players exploit bugs, while some operators rig odds unfairly.
- Legal bans on crypto, high development costs, and blockchain scalability issues limit smart contracts’ widespread use.
- Exploitable code flaws in smart contracts could favor players or drain casino funds if not fixed quickly.
What Is a Smart Contract in an Online Casino?
Smart contracts are rules stored on a blockchain that automatically execute actions when certain conditions are met. They are considered transparent because they’re written in code and locked on the blockchain, so no one can tamper with them once they’re set up.
In online casinos, this means the rules of the game, like how much a player wins or loses, are coded into the smart contract so that it follows those rules automatically.
Cheating Problems in Online Casinos
Cheating in online casinos is not always a one-sided affair, as many think. Both players and casino operators have been accused of indulging in online casino cheating tactics.
Players are known to exploit software bugs to manipulate bets or outcomes. In poker, for example, a player can collude with other players to tilt the game in their favor. There are also instances where players target poorly secured RNGs to predict or influence results.
On the other side of the coin, rogue online casino platforms have been accused of rigging odds beyond what they advertised. Some have been called out on X for tweaking RNGs or payout rates to favor them unfairly.
Dude RNG is literally a fuckin lie in slots at least since my experiencia, the last 3 or 4 year, providers dont have shame, they can scam u without a bonus in thousands of spins, streamers always winning… so pathetic how they rigged them
— DIEGO•🎹 (@AaronRoy96) March 6, 2025
Garry Houghton, an expert sports betting analyst, shared on Quora that casino operators rely on RNGs, which may seem fair but could be designed to maintain the house’s advantage. While you might win occasionally, the odds are ultimately against you over time.
Can Smart Contracts Tackle Cheating in Online Casinos?
It’s not set in stone that transparency in smart contracts can be the absolute panacea to fraudulent practices in online casinos. However, it might help.
For CJ Miller, blockchain specialist and CEO of Dypto Crypto, transparency is crucial in ensuring fair play in online casinos, and smart contracts allow anyone who is interested and has the technical know-how to track their transactions.
In a chat with Techopedia, Miller said:
“Because smart contract code is completely public, anyone with the knowledge to read smart contract language should be able to see things such as probabilities, the actual programming behind certain bets/processes/games.”
Miller explained that the key issue smart contracts can tackle in online gambling revolves around ‘trust.’
He noted that casinos can incorporate smart contracts into random number generators to ensure transparency and eliminate doubts about the randomness of outcomes.
According to Miller, using this technique allows casinos to provide verifiable transparency, removing uncertainty about the fairness of outcomes. He said:
“For example, casinos can use smart contracts as part of a random number generator, ensuring that everything is documented and transacted in a public manner. No more guessing whether or not the casino is random.”
He also emphasized that web3 casinos could leverage blockchain to openly display their financial holdings to ensure all transactions remain clear to everyone involved.
Are There Any Limitations to Using Smart Contracts in Online Casinos?
While smart contracts offer some elements of transparency and immutability vital to curb cheating in casinos, Miller identified key downsides that temper their promise.
He noted that many players lack the technical expertise to verify and understand the transparency provided by smart contracts. Yet, he warned that those who grasp the code could exploit game flaws, like player-favored odds, using automated tools to drain profits and destabilize operations if not addressed.
Miller told Techopedia:
“Even though things are ‘transparent,’ they still require the technical knowledge to understand smart contract language, and since there are relatively few smart contract programmers, most people won’t understand what they are looking at.”
In other words, some other issues that might hinder the use of smart contracts in online casinos include:
- Code mistakes: Smart contracts depend on perfect programming. If there’s a bug or error in the code, it could lead to financial losses or even make games unfair.
- Legal problems: Smart contracts might not fit with gambling laws in some places, especially regions where crypto bans are in effect. This means casinos in those regions could face trouble using smart contracts.
- High costs: Building and running smart contracts can be expensive, especially if the blockchain charges big fees for transactions. The cost is estimated to be around $50,000 for a complex smart contract project, according to software development company LitsLink.
- Scalability issues: Blockchain technology, on which smart contracts rely, can face scalability issues, and this could lead to slower transaction speeds and higher costs as the number of users and transactions increases.
The Bottom Line
Immutability, transparency, and trustless transaction capabilities are some of the main selling points of smart contracts technology. If deployed well enough, smart contracts can reduce cheating activities in online casinos.
Yes, there might be a few limitations. However, its ability to bring fairness and secure transactions to casino platforms still makes it a better option compared to other traditional security measures.
FAQs
How do smart contracts ensure fairness in online casino games?
What types of cheating can smart contracts prevent in online gambling?
Are there any limitations to using smart contracts in online casinos?
References
- iGaming Fraud Increased 64% YoY: Sumsub Shares Alarming Data in 2024 iGaming Fraud Report (PR Newswire)
- Smart Contracts Market Analysis and Insights Report 2025 (The Business Research Company)
- Garry Houghton’s answer to Are online casino games fair, or are they rigged against players? (Quora)
- How Much Does It Cost to Create Smart Contracts in 2025? (Litslink)
