ZEROCoin, making online gambling better for the player?

It wasn’t going to be long before blockchain extended its reach into gambling

ZEROCoin is a good example of how a player might actually benefit, should they choose to gamble online.

Most online casino commercial models feature something called “house edge”, which is a percentage of money they take from their players on average, typically sitting at 1 – 2% points. With some casinos however, it can go as high as 10%. The general rule of thumb states that in the long run, irrespective of whether a player wins or loses, the casino will be better off – hence the term “the house always wins”.

The whitepaper claims that ZEROCoin is the solution to this inequality and therefore offers games with 0% house edge. Definitely a great marketing ploy, because it will likely attract new players, something that online casinos are currently struggling to do, given the high cost per new acquisition.

Thus, what ZEROCoin have done is create its own currency that players have to buy in order to gamble. There is a finite number of tokens created, as is standard practice with cryptocurrencies. Players who buy ZEROCoin with BTC, ETH or fiat currency will effectively stimulate demand in the ZEROCoin ecosystem, therefore raising the price of each ZEROCoin – identical to the blockchain loyalty program model. Smart.

Where it gets really interesting is that 0% house edge only applies to games which are chance based, such as Roulette. If chance games were the only games offered by online casinos with a 0% house edge model, they would never make any money. This is why all online casinos also offer games which require chance + skill, such as Blackjack and Poker.

Most players aren’t highly skilled at card games – only true professionals are. The chances of winning are directly dependent on making the right decisions, and, putting an average player against a professional would invariably result in the professional winning the long game, simply because they make better decisions. To quote directly from the whitepaper:

Although all our games are 0% house edge, there are several games such as Blackjack & Video Poker which will require players to play perfect strategy in order to achieve that 0% house edge. Imperfect play will result in inadvertently induced house edge. Based on an assumption that not all players will be able to play perfect strategy, we expect a small share of winnings from the games where can players can directly affect the outcome, to go back in to casino’s bankroll.”

Let’s now consider an average player: the dealer has a 6 and the player is sitting on a 10 and a 6, totalling 16. The player hits again, because the mindset is to get past that magic 17 but gets a picture and the dealer wins. According to best practice strategy when playing blackjack, if the dealer has a 6, you never hit on anything more than 12.

So, there you have it. Whilst the supply and demand economics of the whole blockchain online casino play certainly make sense for the player, let’s be honest about the fact that there will still be a cut taken by the online casino when an imperfect game is played – which is likely to be quite often.


Max Savransky is Loyalty Director of Loyalty & Reward Co, a leading loyalty consulting firm based in Sydney. He has 10 years’ experience within the loyalty industry including roles at Mastercard Loyalty (Pinpoint), Silverneedle (Next & Sage Hotels) and Pureprofile. As Loyalty & CRM Manager at HOYTS, he launched the highly successful partnership with Qantas Frequent Flyer, including a world-first Qantas Points in-store redemption proposition. He is an active cryptocurrency trader.

Max regularly contributes to www.blockchainloyalty.io, a global resource centre for everything blockchain loyalty.
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