Asia Blockchain Review recently spoke to Raymond Chan, CEO of Alphaslot — an innovative technology research foundation promoting blockchain standards for the casino gaming industry — which has already been granted trust from industry leaders including Synergy Blue. Chan talked about the casino industry in Asia, partnering with a major U.S. gaming solutions company, challenges that Alphaslot has tackled in the casino industry, and his vision for the future of blockchain.
Asia Blockchain Review: What was the inspiration and rationality behind the founding of Alphaslot?
Raymond Chan: Casino gaming floors don’t meet the expectations of the 21st century consumer. Casino gamers value the interactive experience. Casinos must compete with other modes of entertainment that grow more inventive and more convenient (in particular, eSports and social games), while the actual offerings on current casino floors are still mired in decades-old technology.
There is a disconnect between the game makers and the casino operators, and that is the main reason for the delay in innovations. Casinos cannot make the games they desire on their own. Game makers do not interact with players directly on the casino floor to provide what they like. Blockchain is the perfect solution: casino operators and game manufacturers for the first time have a compatible channel with encrypted data (a blockchain API), working together to provide a competitive environment for visitors and gamers, who now have more incentive to spend on casino gaming. That’s how Alphaslot was founded.
Alphaslot uses blockchain to create that real value for casino customers with native digital assets, including tokens and NFTs (non-fungible tokens) that directly bridge casinos and customers for increasing incentive to play on the casino floor through interactions between games and gamers. These features will engage players for longer time-on-device and drive up revenue from casino floors.
ABR: What is the current market of the casino industry, and how do you translate that to Alphaslot?
RC: Casino entertainment no longer caters to newer generations, and the numbers are telling. Thanks to significant investment in the marketing and building of new attractions by casinos, Las Vegas receives 42.9 million customers a year and Macau receives another 32 million. Over 2,000 casinos worldwide generated a combined US$129 billion in revenue in 2016. However, spending on casino floors has dropped from 70% in 1990 to less than 35% in recent years.
We believe that casino gaming and, more broadly, the casino’s entertainment value should be appreciated like all other modes of entertainment available in the internet age — interactively, securely, globally, and responsibly. By design, this entertainment value will be built on an interactive blockchain ecosystem and involve the participation of existing service providers (e.g. game designers, casino operators, regulators) and new types of providers (e.g. distributed gaming technology companies).
ABR: What are some of the key challenges in developing blockchain solutions for the casino industry? How have you tackled these issues?
RC: Every new ecosystem starts with a ‘chicken or the egg’ problem: the supply won’t join the system unless there’s a demand. But demand is challenging to prove without real supply. As these ecosystems flourish, efficiencies increase, greater returns are achieved, and experiences improve exponentially. The Alphaslot Ecosystem is the ultimate ‘farm’ for these chickens and eggs to meet.
To map how Alphaslot can attain a flourishing ecosystem, let’s start by identifying the actors. When we evaluate how casino entertainment works, casino operators invest in expensive buildings to attract customers and create loyalty programs with costly expenses to maintain. But ultimately, customers require good games to play, to stay on the floor, and to come back for more.
As I mentioned before, there is a disconnect between the game makers and the casino operators. With Alphaslot’s ecosystem, casino operators and game manufacturers for the first time have a compatible channel with encrypted data in the Alphaslot API. Here, they can work together to provide a competitive environment for visitors and gamers, who now have more incentive to spend on casino gaming. Alphaslot’s API (Application Programming Interface) is designed as a public protocol for the integration of players’ digital wallets with the gaming products on casino floors.
ABR: How does Alphaslot’s API enable casino operators and game developers to create applications that manage the interaction with gamer activities?
RC: Alphaslot’s API is a universal blockchain socket for the gaming world, enabling casino operators and game developers to create applications that manage the interaction with gamer activities, with real-time updates and the ability to process transactions. In-game collectibles and the related utility slot tokens that allow in-game strategy will engage players for longer time-on-device and drive up revenue from casino floors.
ABR: What does your partnership with Synergy Blue mean for Alphaslot? How will it help the company expand into the emerging market of skill-based casino gaming?
RC: Synergy Blue is a well-recognized name in the American market that provides certified, skill-based games for the casino industry. According to Synergy Blue’s recent survey of over 100 casinos, more than 70% plan to adopt skill-based games. Two-thirds of the United States’ US$40 billion in gaming revenue is generated from slot machines, but casinos want to add skill-based games in order to help attract a new generation of gamblers. As Georg Washington (CEO of Synergy Blue) said in a recent meeting with us in Macau, microtransactions are unheard of in the casino/gambling world, despite being pervasive in the video game market. Our goal is to explore how to leverage blockchain technology to help attract the next generation of gamblers and provide innovative entertainment experiences. We are both excited about exploring blockchain technology and about working with regulators and casino properties to ensure compliance and help spark adoption throughout the industry.
Skill-based casino gaming is an emerging market that began in America and is spreading into Europe and Asia. The partnership with Synergy Blue in America will give us an opportunity to expand into the largest emerging market of skill-based casino gaming in the world, which could lead to demand for interactive products powered by blockchain technology.
ABR: What are some other features/projects we can expect to see from Alphaslot this year?
RC: The new distributed gaming technologies will connect the world’s casino gaming ecosystem — acting as a bridge between gamers, designers, operators, and regulators — so that data can move across systems and parties with the most transparency and the least friction possible. This allows all participants and the industry to benefit from the economies of creativity at scale. As mentioned before, we are solving a ‘chicken or the egg’ problem. We can see major progress on the egg side (game manufacturers) already; now it is time to look into the chicken side (casino operators) and complete the ecosystem design. Projects with casino operators and government regulators will be our focus, and we can expect to see more news soon on that front.
We are still in the early stages of bringing new value to the casino industry through blockchain and interactive gaming. Our goal remains to continue to solidify and extend our brand and technology base. This requires sustained investment in systems and infrastructure to support fast implementation and expansion while we grow. We are planning to add customizable avatars (NFT support) to our ecosystem, and over time, we believe that other features like an automated exchange system may be prudent investments. We also believe there are significant opportunities to better serve our partners, such as improving game quality and better interactive experiences using blockchain and tokens with players. To be certain, a big part of the challenge for us will lie not in finding ways to expand our technology, but in prioritizing our work and investments.
ABR: Can you tell us about your vision for the casino industry in Asia? What is the potential of casinos and blockchain in the Southeast Asian region?
RC: With the recent news of the development of casinos by Japan’s parliament, the Japanese casino gaming market offers enormous future potential. Investment bank CLSA estimates that Japan could emerge as a US$40-billion-a-year gaming market, almost twice as large as Macau at US$27.1 billion and six times that of the Las Vegas Strip at US$6.3 billion. The Cambodian and Philippine markets continue to grow at lightning speed, and we also expect to see more news to come from South Korea and other Asian countries soon. Blockchain, with a carefully designed use case, will see big potential in the region, while the American and European markets continue to develop.
ABR: Apart from the casino and gaming industry, how will blockchain technology change the world?
RC: Trust between parties is expensive when it comes to the ownership of things that have intrinsic value, such as money or a house. That’s why we pay professionals like accountants and lawyers to create ledgers. Blockchain’s core value is the automation of trust between parties. It can significantly reduce the operational friction required to validate ownership and identity by allowing participants to interact directly with one another without someone in the middle providing verification. Most importantly, this technology creates a new asset class on the internet and these assets are well-adapted for fast and free transfer.
As the technology advances, the product can be way more than Bitcoin (a simple currency) but also a piece of music, a book, a work of digital art, or even a full-size HD video. These newly available assets will impact how business is done over the internet — from finance and merchandise distribution management to the internet sharing economy. We will see more investment in these areas in the near future.
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