Why smart contracts matter in gambling, and where they fall short

A smart contract is a program that runs on a blockchain: code and data at a specific address. In gambling, a contract can hold the bankroll, accept a bet, ask for a random number, and pay the result to your wallet in the same flow. The rules are public, and the contract follows them the same way for every player.

Contracts cannot read the outside world on their own. Anything from off-chain, including a random number generated by a service, arrives through an oracle, which becomes one more part you rely on.

Provably fair is a middle ground used at crypto casinos: the casino commits to a hashed server seed before you bet, and you can recompute each result afterwards. Our provably fair crypto casinos page covers casinos that offer it, and crypto dice walks through a verification.

Everything on a blockchain is public, so a contract cannot simply pick a secret random number. Services such as Chainlink VRF generate the number off-chain together with a cryptographic proof, and the proof is verified on-chain before the game can use the number. The proof lets anyone check that the number came from the stated process and was not swapped afterwards.

• Bugs. A flaw in a contract's code can let an attacker drain the funds it holds. Code that holds a bankroll is a target.
• Upgradeable contracts. Some contracts can be changed through upgrade patterns. Then you trust whoever holds the upgrade keys.
• Token approvals. To bet with a token you often approve the contract to spend it. An unlimited approval lets the contract move all of that token from your wallet, even later. Approve only what you need and revoke access you no longer use.
• No chargeback. A transaction that runs is final. A mistake, a phishing site or a bad contract cannot be reversed.

At a custodial crypto casino you deposit to an address the casino controls and play from a casino balance; if you send a token, its contract is the only one involved. You meet contracts directly when you connect a wallet to a dApp casino or sign in with MetaMask. For the pooled-bankroll model, see DeFi in crypto casinos; for keeping control of your coins, non-custodial casinos.