Should Crypto Casinos Be Required to Publish Proof of Reserves?

[noorman0]

I'm not sure if it's necessary, if the casino does have limited liquidity, they can limit the winnings that can be paid out. Most gamblers just expect their winnings to be paid in full, either all at once or in installments. So, a lack of liquidity may occur especially after paying out some big winnings.

[Samlucky O]

Should casino published how much money they have in the beginning? Sort of Proof-of-Reserves? So that gamblers knows that in a event of a big win, we know that they can cover it? Because I remember a case wherein a new casino what hit with a big win and they paid the winner in staggered and not in out get go.

I don't think if it really make sense for casino to show their balance for people to see if they are capable in the beginning, it is just a business and they wouldn't want to reveal themselves,  reason being that this casino sometimes start with a small amount knowing that when people lose more they gain and this amount they gain wil increase their fund. Making it look as if they have enough money initially. So They wouldn't like to show their fund because it is not done that Way. As a matter of fact no business man or woman will show you his or her account balance if he wants to start, because if people should see some balance, no one will want to work with such company likewise in this gambling business.

[Gozie51]

Should casino published how much money they have in the beginning? Sort of Proof-of-Reserves? So that gamblers knows that in a event of a big win, we know that they can cover it? Because I remember a case wherein a new casino what hit with a big win and they paid the winner in staggered and not in out get go.

I have also heard the story of casino not being able to pay out huge winnings online. I have also witnessed it off line at different times.

The point is that, it is suppose to be a normal thing for casinos to published their financial documents to the public just like banks and other companies do from time to time. In banks, the regulatory body or CBN sometimes declares a bank insolvent when its reserve falls below the required amount to be held with them. In companies too, I think there is a particular amount and requirements to be met including financial status before you can register under different categories like limited liability company or public limited company. So likewise, casinos should be able to do that to build customer confidence. I think some casinos have done PR on how much reserve they have. But I don't know if gamblers have direct access to that through the licencing board. Therefore, it depends on the licensing board to ensure financial requirements are met.

I'm just thinking of this set-up as most of us says that licenses is no longer the standard for new casinos to have. They can easily apply for it and once they got roll the casino itself here but we don't know if they have enough bankroll in the beginning.

Does it make sense?

We all know how some casinos are unlicensed and some people still play under them for different personal reasons of illegal activities including evasion of tax payment.

[bitbollo]

I would see something useful once websites use escrow at early time of their activity.
By itself proof of reserves could be a first viable approach but could not be trustable solution to avoid "scam" in the industry.
Unfortunately we have already seen this scenario with one of the famous faucet/gambling websites that despite high revenues (including from mining) they was just not able to keep the business going.

[Alex077]

Should casino published how much money they have in the beginning? Sort of Proof-of-Reserves? So that gamblers knows that in a event of a big win, we know that they can cover it? Because I remember a case wherein a new casino what hit with a big win and they paid the winner in staggered and not in out get go.
Does it make sense?

This idea is not completely unreasonable. As a player, I would also want to know if casino has financial capacity to pay out my big win. Especially in the case of new casino there is always a doubt.

However, in my opinion, showing only Proof of Reserves will not solve this problem. From PoR you may be able to see how much asset the casino has at a given time. But from this you will not know anything about their total liabilities or debt. Also, you will not get any idea about their future cash flow. Even since it is a snapshot, they can temporarily show asset and then withdraw funds later.

If somehow we can see their payout history over the long term then we may get an idea. If a casino has been paying out big wins consistently for 3-5 years then that is more valuable to me than a one day PoR report.

So a casino can voluntarily publish PoR if they want, it will increase transparency. But I will never trust a casino just by looking at PoR.

[danherbias07]

My suggestion is that licensing companies should add this to their requirements whenever a gambling site applies for a license. I mean, this is not within the reach of the gamblers anymore because we are already the ones giving them the money whenever we lose. If they are capable of paying, there should be an organization that could verify it first, and I believe the licensing companies are the ones that should do it.

But I am guessing it's another addition to their work, and they don't want to be responsible whenever a gambler claims that he is not paid on the money that was supposed to be paid.

[Oasisman]

Should casino published how much money they have in the beginning? Sort of Proof-of-Reserves?

Then how are we able to determine whether they publish a legit amount? I mean casinos can fake it. Not unless if this is strictly covered under their license.
AFAIK, there are financial requirements that need to be met before a casino is granted a license. The only thing I'm unsure about is whether they specifically cover reserve funds in case any player acquires a big win early in their operation. Pretty sure there are some sort of things like this generally, as the licenses aim to cover both the casino and players, especially for the top tier licenses.  

[Don Pedro Dinero]

Well, it depends – provided they provide financial guarantees to the relevant authority. In Europe, casinos are not required to disclose how much money they hold, but they must provide a number of financial guarantees to the regulator. In the case of cryptocurrency casinos – which is what the OP is referring to – the licences they typically hold do not offer the same level of safeguards as their European counterparts, although they do usually include financial guarantees, as has been mentioned. So, it would be good if they published their reserves voluntarily, as viljy says, but I, like many others who have answered, don’t see it as necessary.

[Sanitough]

I dont think its necessary. The fact that they were given a license and can afford to operate already means they passed certain requirements before getting that license.

So I dont think they need to publicly show all their funds just to prove they can pay players. What if the money shown is only for display anyway.

The bigger protection should be the consequences if they scam users. If they operate illegally or steal people's money, they should face serious penalties, including losing their license and even going to jail.

[Filicius]

Well, it depends – provided they provide financial guarantees to the relevant authority. In Europe, casinos are not required to disclose how much money they hold, but they must provide a number of financial guarantees to the regulator. In the case of cryptocurrency casinos – which is what the OP is referring to – the licences they typically hold do not offer the same level of safeguards as their European counterparts, although they do usually include financial guarantees, as has been mentioned. So, it would be good if they published their reserves voluntarily, as viljy says, but I, like many others who have answered, don’t see it as necessary.

And by financial guarantees I imagine that you are referring to not only reserves but other types like insurances, endorsements…

Having money sitting still costs money, and in the case of large amounts, more. That is why I think that for me it would be enough to have that security, regardless of the real money in reserves. I also wouldn't mind, as has been discussed on multiple occasions before here, if the amounts to be bet were limited in cases where a potential win would pose a threat to business continuity of the casino.

[Royal Cap]

Well, it seems like there is already a topic about this Casinos Bankroll

And my personal opinion is that I have not seen such a public reserve in any of the casinos I have played so far. But yes, if it is a new casino, it can gain a lot of trust, because then people will understand what the capabilities of this casino are. But big casinos do not need these, because they already have enough reserves.  But if you want to make a small withdrawal from a casino, you can see the balance of the casino's hot wallet. For example if you withdraw USDT from a casino through the Ethereum chain, then you can see the balance of the hot wallet of that casino's network by looking at the blockchain explorer of that wallet, I do not know if this will work for all casinos or it makes any sens.

[Unsoldier]

I think it would be nice if a casino showed that it has enough funds to pay out big wins. For example, they could publish reserve info or undergo an independent audit. A license by itself doesn't tell you how much money a casino actually has. This would be especially helpful for new casinos, so players can understand whether a big win will actually get paid out.

[Franctoshi]

This will be a very nice to see if they're being required to provide proof of funds, and since they're regulated by a country where they operate, then what stops this? Therefore, For the purpose of protection of the customer and to avoid further scams sites that comes and pretends as legit, while with time they go thin air, this help so when we want to do business with any of the crypto casino platforms we have this stuff to look out and be able to identify potential scam casino sites.

[348Judah]

It is not in our discretion to determine whether a cryptocur casino will show their proof of reserve or not accept the decided from their policy to include that for us to see, many platform I have witnessed don't consider showing information regarding this, why some don't mind revealing what they have as proof of reserve even though it is not a means to justify for a reputable complaint casino, we can choose to also intensify more about our research on anyone you wanted to use for gambling without concentrating much on their proof of reserve.

[Supreme Donvic]

That is how it is supposed to be. A casino that is coming up should allow everyone to see their reserve. This will help people know that the casino is capable to pay any amount of money that people win in there casinos. One of the major reason why some casino close down or run away is because they don't have the amount of money to pay those that have won in their casino, so they decide to close down the casino and run away, and people will start thinking it is a scam that they planned on doing, meanwhile they never plan to scam anyone, they had no option because they could not afford to pay the people that won.

[EluguHcman]

Should casino published how much money they have in the beginning? Sort of Proof-of-Reserves? So that gamblers knows that in a event of a big win, we know that they can cover it?

For security reasons I don't find this ideal reasonable.
Do you know that if the casino do so to run a transparent balance sheet it will attract serious attention on hackers to their site? I guess you did not think about this.

Know that most unlicensed casinos and gambling platforms are getting banned by the authorities, else I will recommend this ideal for those online Crypto unlicensed gambling companies that operates offshore.
If you are worried about the casino competencies to pay players with huge amount of winning payment, I think you should relax because if they also sets their payout maximum according to their bankrolls.

Because I remember a case wherein a new casino what hit with a big win and they paid the winner in staggered and not in out get go.

To be safer over this threat, then you should avoid jumping into new casinos blindly without proper research.
There are also new casinos that has reputation but it is better you stick to your favorite.

[yenerbatmaz]

Should casino published how much money they have in the beginning? Sort of Proof-of-Reserves? So that gamblers knows that in a event of a big win, we know that they can cover it? Because I remember a case wherein a new casino what hit with a big win and they paid the winner in staggered and not in out get go.

I'm just thinking of this set-up as most of us says that licenses is no longer the standard for new casinos to have. They can easily apply for it and once they got roll the casino itself here but we don't know if they have enough bankroll in the beginning.

Does it make sense?

There is no need for such a thing, because no casino pays out more to a gambler than it has won.
Even a newly established casino distributes what it collects from players only in small increments.
We cannot view casinos in the same way as crypto exchanges.
This is because, in casinos, the gamblers themselves constitute the liquidity.
The more gamblers there are, the more liquidity flows in.

[shinratensei_]

It makes sense, but it's unnecessary thing to be honest. Most of casino around us are crypto based, and their total holding in the hot wallet is fully transparent in the blockchain. However, they have no obligation to show up their offchain balance because most of them are private equity casino. So that is optional for tem whether they wanna publish all of their holding assets or not.

Nevertheless you must not be overthinking if casino can't pay the player because most of casino might put cap to how much amount that can be won by a player. It's a protection to ensure a player can't make them go bankrupt just because a jackpot win.

[Kelward]

I think it would be nice if a casino showed that it has enough funds to pay out big wins. For example, they could publish reserve info or undergo an independent audit. A license by itself doesn't tell you how much money a casino actually has. This would be especially helpful for new casinos, so players can understand whether a big win will actually get paid out.

It would be nice if new casinos are very transparent to show gamblers that they are capable to pay out big wins, it will increase their level of confidence in the gambling industry which will in turn attract big bettors to gamble on their sites. If new casinos can publish their reserves and possibly have an independent body to audit them that will show a lot of transparency about their gambling platform but I don't know if any new casinos have done this.

A lot of gamblers are no longer trusting a mere license as a proof of a casino's trust because apparently licenced casinos have scammed gamblers in the past. The best way to trust a casino is the longer they stay in business with good reputation the higher trust ratings that they would get.

[Smartprofit]

I don't think this should be an online casino's responsibility. However, in my opinion, having such a reserve can be a significant competitive advantage for a casino, especially for a new online casino that doesn't yet have a good reputation in the market. 🙋

At the same time, having a reserve in itself is simply a clever marketing ploy. However, for a player, simply knowing about such a reserve may not be enough.

For example, an online casino might take out a loan, show the reserve, and then repay the loan to the bank. In this case, players won't even know in time that the casino has liquidated its reserves, that there are no more reserves. No one will monitor the availability of reserves 24 hours a day, 7 days a week.

Furthermore, players should be confident that the existing reserve fully covers all their deposits. Are online casinos ready for this level of transparency? I'm not sure...

For me, it's enough to know that an online casino pays out winnings to players without delays or KYC requirements. Information about the casino's reserves is not critical for me.  However, for other players the situation may be different. 🧑‍💻