There's already many provably fair smart contract-based casinos out there on blockchains like Ethereum's and TRON's, but that really does not mean much if you don't happen to go through the code and verify things are as they should be. I suspect very few people take the time to do this. A lot of those casinos also make it pretty difficult to view the actual smart contracts as well, disappointingly. There's definitely potential in smart contract casinos, but more centralized ones will likely stay on top for a while more.
Well that is not the case. Regardless of how many casinos start operating using the Eth blockchain, there would still be casinos that would work in the traditional channel and people would enjoy it. In countries like China, where there is no good signs for cryptocurrency to thrive, traditional casinos in places like Macao would still enjoy the monopoly and would work in their usual way.
At the same time, for online gamblers, there are other lots of developments are going on which are finding big success when adopting provably fair and blockchain based smart contracts for verification purposes. Still, blockchain cannot dominate 100% as per OP is foreseeing only option, that may not happen for ever
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