Thirty years ago, Neal Stephenson released *Snow Crash*, a sci-fi novel featuring a mafia pizza delivery driver named Hiro Protagonist who encounters a "linguistic virus." Fast forward to 2021, and this book inspired a significant rebranding at a company valued at $500 billion. The term "metaverse" first appeared in *Snow Crash*, gaining traction in the tech industry, especially among developers of Second Life. However, it wasn't until Mark Zuckerberg's announcement last year to rebrand Facebook as Meta that the term captured widespread attention. "From now on, we're going to be metaverse-first," he proclaimed, leading to increased interest and a surge in searches related to the metaverse. According to Evoplay's chief commercial officer, Vladimir Malakchi, "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."
Since Zuckerberg's announcement, the metaverse has emerged as a prominent topic within the gambling industry. Entain has been a leading player in this space, launching a new "global innovation hub" this year and committing £100 million to invest in disruptive technologies, including those related to the metaverse. The World Poker Tour declared it had made "the poker world’s first step into the exciting metaverse" by forming an NFT poker club. Gal Ehrlich, CEO of Beter, remarked on the buzz surrounding the metaverse: "It’s become a very hot topic," yet he acknowledged that various sectors, not just gambling, are exploring this new realm. Expectations for the metaverse's value are staggering, with Bloomberg Intelligence analysts predicting it could reach $800 billion by 2024. Morgan Stanley analyst Brian Nowak suggested it might peak at $8 trillion.
Defining what the metaverse truly entails remains complex. Relax Gaming's chief product officer, Simon Hammon, stated, "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 agree that the metaverse is a form of a digital world. However, as Funfair Technologies' COO Lloyd Purser highlights, digital worlds have existed for years within popular video games. He points out, "The metaverse is not new. Have you ever played an MMO? That’s a metaverse.”
The current iteration of the metaverse, according to Rarerthings founder Stefan Kovach, is distinguished by its reliance on blockchain technology. He explained, "The shift that’s taking place is one whereby those metaverses will increasingly be built on Web3." This allows players to own items within their virtual environments, often through non-fungible tokens (NFTs). "The reason behind that is predominantly around ownership. It’s enabling ownership of the land, of items in the game. 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," Kovach said. This shift is expected to foster decentralized economies governed by the community.
Ownership in Web 2.0 worlds allows players to possess skins and items, but Kovach emphasizes that the difference lies in the ownership model's structure. "If you look at esports gaming right now, it still doesn’t act as a metaverse, because there’s no strong financial incentive to drive that level of connection," Ehrlich argues. However, interoperability could change that. Purser elaborated, "Let’s take this fashion NFT exchange as an example. So Gucci creates a limited edition run of T-shirts, and then you want to have an avatar in The Sandbox. You can wear that limited edition Gucci digital clothing in any metaverse, because it has interoperability across metaverses."
The gambling industry stands poised to benefit from this emerging technology, blending immersive gaming experiences with traditional betting products. JNS Gaming's LynxBet brand is already making strides in the metaverse, with CEO Jeremy Taylor noting, "We’ve started to create our own small metaverse world effectively, in which customers can come and play these different products." Meanwhile, Malakchi sees the metaverse as an opportunity to connect gambling with video gaming innovations. He envisions integrating the luxury of physical casinos with the convenience of online gaming: "The metaverse will give an option to different people who … can’t come to Las Vegas or to Macau to feel that inside."
Hammon, however, expresses skepticism about whether traditional casinos will adapt successfully. He raises crucial questions about evolving attractions: "Will players in 10-15 years want to play a traditional slot in current form when it will compete with a much more interactive entertainment space?" The role of NFTs in enhancing gambling loyalty is another area of interest. Kovach suggests that with the right models, loyalty rewards could pivot towards player recognition rather than reliance on classic casino structures.
Ehrlich remarks that while the fundamental mechanics of popular games are likely to remain intact, the user experience will shift significantly. "From a flat, 2D screen display, you can create a very sophisticated 3D world. There’s a lot of new opportunities that come from the metaverse that slots can build," he explains. BetGames’ CEO Andreas Koeberl emphasizes the need for operators to offer something uniquely engaging in the metaverse, stating, "You always have to think about what’s the value of the metaverse, what makes it more valuable than the traditional mobile world?"
As the metaverse evolves, questions about user attraction and retention loom large. Its success may depend on reaching a critical mass of participants. Koeberl relates this to perceived ease of use and usefulness: "If I can do something already, what’s the value of doing it in the metaverse?" Hammon is more reserved about the metaverse's potential, pointing to the gaming industry's existing technological limitations.
The road ahead includes significant regulatory challenges. Purser highlights the complexities emerging from the U.S.'s ongoing online gambling regulations. "How the hell are they going to start regulating the metaverse?" Kovach identifies regulatory caution among many gambling establishments as a major barrier. Taylor warns that an unregulated metaverse could inflict significant harm on consumers.
As companies attempt to gauge their place in this new digital frontier, identifying early adopters proves challenging. Malakchi initially predicted most early adopters would be younger individuals but found the median age of interested parties to be 34. Regulatory caution, the readiness of new technologies, and user engagement strategies will shape the metaverse’s future.
