When thinking about Ethereum Casinos, smart contracts are increasingly used. Games of chance online are provably fair with the implementation of a mechanism in smart contracts for online gaming.
This piece explains how gambling on Ethereum works and why it matters more for Ethereum than for other blockchains. We will also explain how to verify whether a particular casino’s claims of fairness have any basis in reality.
Risk of loss: Online gaming involves risk. We strongly advise against wagering with funds that you cannot afford to lose. All online casinos reviewed by CryptoCasinos are restricted to persons 18 years of age or older. Please check with local authorities regarding online gaming restrictions in your country of residence.
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What Provable Fairness Actually Means on Ethereum
Provable fairness for games of chance. In short, Provable fairness for games of chance means that anyone can verify the outcome of a game of chance. One does not have to rely on the operator’s word.
Seed-based verification: The platform hashes the server seed for each game of chance. That platform releases it to players before the game begins. As the game finishes, the platform releases the same server seed to players. They can then compare the two hashes to verify that no manipulation has taken place.
On-chain randomness: The platform uses a verifiable random function, oracle-based randomness, or Ethereum block data to generate auditable randomness.
Smart contract settlement of payouts. The code in smart contracts determines how payouts settle, rather than storing this in a private database.
Transaction transparency: Players can see other players’ wagering and payment activity on the Blockchain.
Gas costs: Verifying on-chain is the most auditable method, but also the slowest and most costly. Therefore, each platform must strike a fair balance among these three aspects.
Note: A “Provable Fairness” casino calls its games “Provable Fairness”. Most such casinos do not actually verify any outcomes. In most cases, the term is merely used to sound very credible.
Why This Matters More on Ethereum Specifically
Ethereum, as a platform, was the first to implement smart contracts, thereby making verifiable gambling possible. Therefore, on Ethereum, there are strong wallets, auditing firms that already audit smart contracts, and good block explorers. That’s why, on this platform, a fairly sophisticated user can verify a casino’s claims regarding the fairness of games.
Platforms that use the Ethereum network differ in many ways. For example, some contracts undergo formal audits before developers deploy them to the network; others do not. Some platforms use Ethereum for deposits and withdrawals. However, the actual game logic is off-chain.
For more information on specific Ethereum casinos, their fairness, and how their games work, check out the CryptoCasinos ETH rankings. These rankings include a review of each listed Ethereum casino. It also includes information on any audits conducted on the casino’s smart contracts.
Readers can check casino rankings by contract transparency. Moreover, they can find how much of each game’s code is implemented on-chain, rather than simply labeled as “provably fair”.
How to Verify a Platform’s Fairness Claims Yourself
- Check the contract’s address on a block explorer. See if the contract’s source code is publicly available.
- Look for independent audits of the casino and review the reports (some casinos have multiple reports for different games).
- Check whether the platform determines outcomes on-chain or computes them off-chain before settling them on-chain.
- Test seed verification on a small wager before depending on it for all of your wagers.
- Consider gas costs when comparing your bets to your potential winnings. Some games may be cost-effective only for larger wagers.
This requires a bit of work and the same effort that most crypto users already spend to read a DeFi protocol’s smart contract before depositing funds.
What This Signals About the Broader Ethereum Ecosystem
The same tools that audit verifiably fair gambling platforms can also audit other DeFi applications, such as lending contracts. This means the same level of due diligence is necessary to gamble at an Ethereum casino as to deposit funds in a lending protocol.
A raft of new consumer apps on the Ethereum platform is now adapting the verifiable-games tools. Ethereum remains a major area of DeFi. As more developers build these apps, increasingly sophisticated gambling platforms will likely apply these tools in due course.
Note that there are some trade-offs regarding the cost of gas for transactions on the blockchain transactions. Full on-chain verification, of course, is the most auditable option, but it’s the slowest and most expensive of the different ways to verify the fairness of games. Platforms with strong tooling and a healthy audit ecosystem will, of course, continue to attract verifiable applications.
However, other platforms without an adequate infrastructure will not be able to offer the same level of checkable fairness.
Responsible Gambling
We recommend that all online gaming platforms support responsible gaming and have tools in place to enable deposit limits, loss limits, and self-exclusion. Should someone find themselves struggling with a problem gaming habit, help is available in the form of confidential, free counseling services from problem gaming assistance organizations. While on-chain verifiability speaks to the fairness of a game, it in no way ensures that a gamer will not lose money playing said game.
