Cryptocurrency in the gaming sector has largely been limited to online gambling. Until recently, that is.
Now, a gaming company in Macau is looking to finally integrate digital currencies like Bitcoin and its underlying technology, blockchain, into the world’s largest gaming hub. Dragon Corp. recently partnered with Thai-based Wi Holding to sell digital tokens via an initial coin offering (ICO) in a bid to raise $500 million, CNBC reported.
The ICO will see junket operators offering credit on behalf of the casino operators, according to the report. The money raised from the sale will help fund the construction of 1,600-square-meter floating Dragon Pearl Casino Hotel, which is expected to make its way to Macau from Norway by 2019.
Wi Holding CEO Chakrit Ahmad told the news outlet that ICO investors will basically become “a shareholder in a junket, utilizing blockchain technology, getting revenues from that, and plugging that back into the token.”
The tokens will be listed in multiple exchanges, so that investors will be able to “cash out” their funds via major digital currency exchange worldwide or Wi Holdings’ own exchange, according to Ahmad. The company also plans to develop a “social wallet” that will operate much like a debit card, allowing players to withdraw fiat currency from an ATM.
Dragon Corp and Wi Holding, which have already raised $265 million, will press on with the digital token sale on October 27, even though ICOs have been facing increased scrutiny from regulators concerned with possible cases of fraudulent fundraising and speculative investment.
Several weeks ago, the People’s Bank of China banned fundraising activities that use ICOs, ordering companies that have already raised money via token sales to refund their investors. The Chinese central bank also ordered cryptocurrency exchanges in the country to halt trading services for the domestic market.
Dragon’s ICO, however, will not be affected by the Chinese government’s crackdown because the digital tokens will be issued in Hong Kong, according to Ahmad. Hong Kong’s Securities and Futures Commission characterizes ICO-issued digital tokens as “virtual commodity” that are not subject to regulation, but tokens that offer buyers an equity stake fall under “shares,” and are thus subject to the commission’s rules.