Thirty years ago, Neal Stephenson released *Snow Crash*, a science fiction novel featuring Hiro Protagonist, a pizza delivery driver who stumbles upon a linguistic virus. This book is noteworthy for coining the term "metaverse," which has since gained traction in the tech world, particularly among creators of platforms like Second Life. The term remained relatively obscure until Mark Zuckerberg announced last year that Facebook would rebrand itself as Meta, a move that propelled the metaverse into the spotlight of public interest. Zuckerberg stated, “From now on, we’re going to be metaverse-first,” which spurred a surge in consumer interest. Evoplay’s chief commercial officer, Vladimir Malakchi, noted, “After Facebook renamed to Meta, I think hundreds or even thousands of different metaverses were created and the prices in them shot up. I think you can buy a flat in the metaverse for the same price as you can buy a real one.”
In the aftermath of this rebranding, the metaverse emerged as a focal point in discussions about the future of gambling. Entain, a major player in the betting and gaming sector, announced the establishment of a new global innovation hub with an investment of £100 million aimed at "disruptive technologies," including those relating to the metaverse. The World Poker Tour also claimed to embark on “the poker world’s first step into the exciting metaverse” with the unveiling of an NFT poker club.
As Gal Ehrlich, the CEO of Beter, remarked, “It’s become a very hot topic.” While gambling is one of many sectors exploring the metaverse, estimates regarding its potential value are staggering, with Bloomberg Intelligence suggesting it could reach $800 billion by 2024. Morgan Stanley analyst Brian Nowak believes that the figure could peak at $8 trillion. Yet, despite the enthusiasm, a clear consensus on the metaverse's definition remains elusive among industry leaders. Relax Gaming's chief product officer, Simon Hammon, shared, “We’ve got a vague sense of what things currently exist in what we call the metaverse. I don’t think anyone truly understands or knows what it actually is.”
Most definitions depict the metaverse as a digital realm; however, Funfair Technologies' COO, Lloyd Purser, highlighted that various digital environments have existed long before the current craze. He pointed out popular video games like *Fortnite* and *World of Warcraft* as examples of earlier metaverses. “So Fortnite is a metaverse. World of Warcraft is a metaverse. The metaverse is not new. Have you ever played an MMO? That’s a metaverse,” he explained.
The distinction, however, lies in an evolving aspect of ownership. Stefan Kovach, founder of Rarerthings, emphasized that the latest metaverse incorporates blockchain technology, allowing users to own specific items within their digital environments through non-fungible tokens (NFTs). He elaborated, “It’s enabling ownership of the land, of items in the game. Merchandise, stuff that you buy within the metaverse, all manner of things that you can imagine in the real world, in theory can be created and sold and interacted with in a metaverse environment.”
Although Web 2.0 digital worlds like *Fortnite* and *Roblox* offer item ownership, the blockchain integration proposed for the metaverse allows for ownership across different games, enhancing interoperability. “There’s a word in the blockchain world — interoperability,” Purser explained. “Let’s take this fashion NFT exchange as an example. So Gucci create a limited edition run of T-shirts and they’re for sale on that fashion exchange. You can then basically wear that limited edition Gucci digital clothing in any metaverse.”
This concept of ownership may offer unique opportunities within the gambling industry. JNS Gaming’s LynxBet brand is one of the few gambling operators actively exploring the metaverse. CEO Jeremy Taylor described their initiative as a new playground for players, intending to differentiate from traditional online gambling sites. “We wanted to build our own frontend to tap into this opportunity to offer the right differentiated customer experience,” he stated. Meanwhile, Malakchi sees the metaverse as a chance to merge elements of traditional casinos with online gaming experiences. He believes this immersive environment may provide an experience akin to visiting prestigious casinos in Las Vegas.
The outlook on how gambling may evolve within this digital space varies among industry experts. Hammon remains skeptical, questioning whether players would opt for a traditional casino experience over novel virtual interactions. “Without doubt the traditional and current sense of casinos will need to adapt,” he said, noting that advancements in user engagement will be essential for future success. Conversely, Ehrlich insists that the core mechanics behind popular games such as slots might remain relevant while focusing on enhancing player engagement and user experience.
The potential for NFTs to transform loyalty systems within casinos also warrants discussion. Kovach pointed out that NFTs could allow loyal customers to gain recognition as VIPs, but he cautioned against unrealistic expectations, suggesting that not every gaming model will lead to immense profit. On the flip side, Hammon argues that while traditional gambling mechanics may not vanish, the strategies and approaches to engaging users will need significant adaptation. “The whole gameplay, the mechanic, the player behaviour, I think will need to dramatically shift,” he asserted.
At the core of future developments in the metaverse lies the challenge of user engagement, which hinges on understanding the perceived ease of use and usefulness of new technologies. Koeberl noted, “If I can do something already, what’s the value [of doing it in the metaverse]?” Hammon echoed these sentiments, expressing concerns over whether the gaming industry is ready to embrace such an evolution.
As stakeholders await advancements in technology and user participation, the profile of early adopters has surprised some. Malakchi revealed that data indicated the main early adopters of metaverse technologies are actually over 30 years old, contrary to assumptions that younger demographics would lead the charge.
Regulation remains another crucial issue. “How the hell are they going to start regulating the metaverse?” Purser asked, addressing the complexities of integrating gambling regulations into this new digital space. Kovach pointed out the hesitance among companies to invest significantly in the metaverse due to regulatory uncertainties. Without clear guidelines, companies may hesitate to dive in thoroughly, especially if faced with overbearing regulations. The industry acknowledges the necessity of protection for customers, a sentiment echoed by Taylor, who warned against the risks of an unregulated metaverse.
In this complex landscape, the regulatory environment should evolve in tandem with technological advancements. Ehrlich emphasized, “It could become a real wild west, and ultimately find itself coming to a very disappointing end.” With many industry leaders taking a cautious stance, exploring the metaverse's potential requires a careful balance between innovation, user engagement, and regulatory considerations. As the technology matures, the future of metaverse gambling remains uncertain but continues to attract attention and speculation.
