Will I be able to play Mega Moolah using Facebook's Libra?
The ink had barely dried on Facebook's Libra white paper when a small number of people in the online gambling community began wondering out loud if Facebook's much-anticipated cryptocurrency would be usable for casino deposits. Maybe you have even wondered if you will be able to play Mega Moolah using Libra.
This post aims to answer that question in both the short and long terms. It will discuss what Libra is, what Facebook hopes it will be, and what it will mean to the billions of users Facebook hopes will embrace it. Needless to say that we do not really know what Libra will become. We only know what people are dreaming it could be.
An introduction to Libra
Let us begin with a basic introduction to Libra. Facebook began hinting at its cryptocurrency plans more than a year ago. It wasn't until mid-June 2019 that the company unveiled two white papers, one pertaining to Libra and the other pertaining to Calibra.
The former white paper laid out Libra as a cryptocurrency project that would eventually result in the release of a stablecoin of the same name. Libra is a stablecoin inasmuch as it will be backed by a number of fiat currencies along with some government securities. It will be funded primarily through private investments. It is worth noting that PayPal, Visa, eBay, and a number of other big-name corporations have already invested in Libra.
As for Calibra, its white paper explained that it is the digital wallet Facebook intends for use with Libra. It is unclear why Facebook felt it necessary to create a dedicated wallet. There is speculation that a dedicated wallet gives them the ability to incorporate it into Facebook, WhatsApp and other company-owned properties without having to worry about outside forces messing with the code.
All possible reasons aside, combining the two projects together gives Facebook an enormously powerful digital monetary system ready to be implemented on their existing infrastructure. This is no small thing. Facebook's infrastructure already allows Libra to go where Bitcoin et al cannot.
What Libra will be used for
Facebook's short-term goals for Libra are pretty simple. They are looking to encourage the 2.38 billion people who already use their platform to get a wallet and fill it with coins. Then they hope to encourage them to trade among themselves using Libra. This would ostensibly include both consumers and businesses that already interact on the world's number one social media platform.
They also hope to encourage businesses not on Facebook to at least get a Calibra wallet so that they can accept Libra. Here is the beauty of it: transacting business with Libra and Calibra would eliminate the need for payment processors acting as intermediaries. Consumers would push coins directly to merchants - no middleman involved. In theory, this would mean no fees. But do not be surprised because Facebook will still monetize the transactions.
The short-term goals for Libra are such that it is highly unlikely you will be able to play Mega Moolah with it. For that to be possible, online gambling operators would have to entangle themselves with Facebook, its network, and the worldwide regulatory framework that governs how Facebook does business. That is not likely to happen unless Facebook launched their own online casino and partnered with Microgaming.
Online gambling operators already go to great lengths to register their businesses in jurisdictions with friendly regulations. That's why they choose places like Malta and the UK. Facebook is a worldwide property that is regulated differently in different jurisdictions. Accepting Libra as a payment method would force gambling operators to subject themselves to each jurisdiction's regulations. This is not such an easy task.
Currency for developing nations
Facebook's short-term goals for Libra will allow it to pursue its long-term goals. One of which is providing currency to developing nations. Expect them to monetize Libra as much is possible in the short term in order to raise the cash that they need to reach those long-term goals.
The idea behind providing currency to developing nations is to level the economic playing field between the haves and have-nots, at least according to Facebook's proposals. Those behind the Libra project see a lack of access to fiat as one of the things hindering consumers in developing countries from enjoying the same kind of lifestyle citizens of developed countries already enjoy.
The principle here is somewhat debatable. But going with Facebook on this, it appears as though they believe they can improve the standard of living by giving people who do not have access to fiat a way to transact business via digital currency.
Let us assume that Facebook achieves its long-term goals as anticipated. They intend to introduce new products and services to Libra users in developing countries. Such products and services will all be related to technology in hopes of leveling that playing field as well.
Long-term gambling prospects
It is a safe bet that people will not be playing Mega Moolah with Libra in the short term. We have already explained why. But what about the long-term? What happens if Facebook does succeed in transforming Libra from just another cryptocurrency into a monetary system for developing nations? Would that change anything?
To answer that question, we turn to one of the comments Facebook's David Marcus made while commenting on the release of Libra in mid-June:
"Bottom line: You won't have to trust Facebook to get the benefit of Libra. And Facebook won't have any special responsibility over the Libra Network... We've been clear about our approach to financial data separation and we will live up to our commitments and work hard to deliver real utility."
Marcus' comments came in response to critics who claim Facebook cannot be trusted. Marcus made it clear that Facebook is not concerned about the trust issue. They believe they have put to rest any and all suspicions by creating a quasi-dependent foundation to oversee the Libra network.
The existence of that foundation may satisfy regulators already questioning whether or not they should intervene. But it may not be enough to appease online gambling operators, even if Facebook achieves its long-term goals. So the chances of depositing Libra to play Mega Moolah in five years from now are still pretty slim. However, there is one way to get around that.
A Facebook gambling app
There is a way to bring Libra into the online gambling arena without involving international gambling operators. All Facebook would have to do is develop its own gambling app. Just like setting up their quasi-dependent foundation, they could create an independent subsidiary registered in a friendly jurisdiction. Then they could implement their own gambling operation and contract with game providers just like any other operator does.
That would theoretically make it possible to play Mega Moolah with Libra. But Facebook would have to be willing to assume some financial liability. They would have to be willing to convert Libra deposits into supported fiat in order to allow players access to Mega Moolah's progressive jackpots. If they were not willing to take on that liability, they couldn't offer the game.
The upsides of a Facebook gambling app should be obvious. Online gambling is an incredibly profitable industry that turns ordinary business owners into millionaires. To say there is money to be made in gambling is to state the obvious. Facebook could increase its revenue substantially, thus providing even more resources for developing Libra and Calibra.
If Facebook were willing to assume the liability that comes with offering Mega Moolah, their participation could fuel even higher jackpots by bringing millions of new players into the fold. Just sit back and think on that for one minute. If just 1% of Facebook's 2.38 billion users were playing Mega Moolah at any given time through a dedicated gambling app, that would amount to 23.8 million people contributing to the Mega Jackpot with every spin of the reels! We would see Mega Moolah jackpots reach lottery jackpot size levels very quickly.
It is now a waiting game
The cryptocurrency community now has a better idea of what Libra will be thanks to the release of Facebook's white paper. Now it's a waiting game. We all watch and wait to see exactly when and how Libra and Calibra will be rolled out. In the meantime, regulators are already preparing to step in.
On the regulatory radar are Libra's blockchain and backing. Its blockchain is somewhat curious in that it is not decentralized. It has built-in top-down control that could allow Facebook to maintain a tight grip even though the network is technically controlled by the Libra Foundation. Any indication that Facebook is pulling the strings will certainly light a fire under regulators.
Regulators will also be paying attention to Libra's backing. Given that the stablecoin is backed by fiat currencies and government securities, its price will be subject to the same manipulation fiat currencies are subject to. It is entirely possible that regulators will attempt to influence the value of Libra if it suits their purposes.
Libra and Calibra are now out there as white papers to be consumed by anyone who is interested. Once the projects are in full operation, we suspect a lot more people will be using cryptocurrency than are doing so now. Whether or not they will be playing Mega Moolah with Libra remains to be seen.
Byline: This article was published by Mega Moolah expert Henry. Media and other enquiries.