Gambling On Blockchain: Why Lotteries Need To Bet On Blockchain
Ever tried your luck at the Powerball or Mega Millions? Are you a millionaire already? Do you have concerns over how the odds of winning are stacked up against you? Do you believe that the system is fair or transparent enough? Well, let’s find out.
Betting on the Blockchain
Despite what most people think, while the lottery is a gambling product, due to the high volume associated with the industry, which experiences year-on-year growth, lotteries can be referred to as a commodity. Cumulatively, the entire lottery sector makes up around 29% of the total amount of revenue generated globally in gambling.
However, with the drastic growth in the digital economy, the lottery sector faces a new set of challenges, such as the demands for transparency and fairness, powered by advanced technologies such as Blockchain technology. With the innovative nature of Blockchain applications, the lottery market could enjoy significant growth.
An Inside Job? The challenges and Blockchain-based solution
Have you by any chance heard about the Hot Lotto Fraud Scandal, where an individual by the name of Eddie Raymond Tipton rigged the Random Number Generation system to gain an edge? Well, the former IT director at America Multi-State Lottery Association was sentenced to 10 years for rigging the RNG, allowing him to win the $14.3 million jackpot in 2010.
Above all, fairness is a challenge that the lottery industry has to deal with daily. To be precise, fairness is essential to protect the integrity of the lottery systems. For instance, the RNG has to constantly produce truly random numbers to ensure that each player gets a fair chance at winning the lottery. Thus, blockchain-based lottery systems record the random number generated on the blockchain, relying on recorded random numbers to produce truly unique combinations.
Since no one is informed of the next recorded random number on the blockchain, the system forms an additional floor of randomness to the selection process.
What about the prizes? Are they paid on time? Lotteries are sometimes marked by high levels of corruption, which affect the players when it comes to the distribution of prize money.
Moreover, since the players have no way of obtaining information regarding the distribution of prize money, they have no reason to trust the lottery organization. Also, once a player ticket number matches the random number provided by the system, the prize money is automatically allocated to the players, via their individual wallets.
In addition, since the smart contracts are made public, the players can audit the code, to ensure that the terms of the contract ensure the fair distribution of funds. Finally, the blockchain-based lottery program ensures that there is no foul play in the ecosystem.
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