Might Web-Based Online Casinos Be Near Extinction In 2024?

Proponents’ spin on cloud technology and what it really is

If you read content put out by companies that sell access to cloud technology or press releases from the agencies they contract to market them, you’d think “the cloud” is the pinnacle of a digital utopia, where everything runs smoothly at lightning speeds and puppies live forever. The truth about the cloud is far less flowery, however.

The real difference between offering an app or website on the cloud versus the web is who owns the servers that power those apps and websites. Either way, the services depend on that hardware and the Internet to operate.

When businesses opt for the cloud, they are really just renting bandwidth on servers that someone else owns instead of maintaining servers themselves. Those rental payments also usually come with a level of service and access to the software to use of those servers.

Renting vs. owning can make sense for many businesses. The potential perks are quite similar to renting or owning physical real estate in the offline world.

Standard services that come with cloud contracts

If you’re renting a brick-and-mortar space for your business, it’s typically the landlord’s duty to maintain the space so it’s useful. Depending on the rental costs, that can represent savings for businesses in terms of labor and time.

With cloud services, the premise is the same. Online casino operators and other businesses don’t have to devote resources to several concerns pertaining to the maintenance of servers like:

• Developing software to allow the hardware to facilitate the functions of the apps and websites
• Devoting physical space and power to servers
• Hiring staff to maintain servers
• Observing compliance issues

Like with any other expense, businesses need to weigh the price that cloud services charge against what it would cost to take care of all those needs themselves or outsource the needs piecemeal. So far, many of the popular online casino brands in the US have decided that cloud services are worth the cost.

Cloud services already prominent in online gambling

Cloud services like Amazon Web Services (AWS) and Microsoft Azure are already heavily used by US online casino operators. AWS powers apps like DraftKings Casino, Fanatics Casino, and FanDuel Casino.

Vendors working with online casino operators have also migrated their services to the cloud as well. Kinectify, which provides risk management solutions for online gambling, announced its move to Azure on June 26, 2024, as just one example.

One factor that might make some gaming companies hesitant to make the move, even if it would represent a savings, is data security. That’s where gambling licensees in the US must engage savvy professionals to protect their interests.

Tribal gaming is a perfect example of data security concerns

An increasingly crucial part of sovereignty for federally recognized tribes in the US is control over the data that is a by-product of commerce and life within those groups. Those concerned with data sovereignty are litigating the parameters of that premise and working to make the concept a reality with vendors.

For tribal gaming operations, then, access to data takes on an even more important role in the rent vs. own conversation. While it might be more expensive in other ways, owning the servers allows tribal authorities much greater control over who can access those servers, how, and when.

To ensure sovereignty while reaping potential competitive and cost benefits of cloud services, tribal governments need to take great care in the language of service contracts and continually review such agreements. Independent, regular audits of server activity logs can verify that tribal authorities continue to own their data exclusively.

While tribal governments also have the option to partner with existing online casino operators and simply collect revenue shares, that situation demands another cost analysis. If they do decide to build out and maintain their own online gambling platforms, using a cloud service is essential to offer a competitive product.

Web-based online casinos are going the way of the non-avian dinosaur. If tribal gaming operations want to be more like modern dinosaurs than those varieties, they must confront the challenge of using a cloud service while protecting their sovereignty.

By Derek Helling