How smart contracts work in crypto casinos

Smart contracts translate casino logic from the black box to the viewed code on the blockchain. Bets, odds, house edge, randomness and payouts are recorded in onchain events - they can be checked. In this case, the casino can be completely on-chain or hybrid (part of the logic is out of the chain). Below is how it works in practice.

1) Basic architecture

Bank/Cash Desk Contract (Vault/Bankroll). Keeps liquidity, accepts deposits/issues payments, applies limits and commissions.

Gaming contracts (Games). Rules for specific games: roulette, dyce, crash, slots, dice, coinflip, Plinko.

Randomness module. Source of random numbers: commit-reveal, VRF (verified randomness), less often - own schemes with multilateral disclosure.

Oracles/services. For VRF or coefficients; are called by the transaction and return a provable result.

Affiliate/Bonus Module. Stores referral interest, cashback, wager conditions.

2) Bet life cycle (in steps)

1. Deposit. The player sends a token/coin to the cashier or makes an "approve" to write off the contract.

2. Rate creation. Calling the 'placeBet (...)' function with game parameters (amount, selection, risk limit, slippage for coefficients, VRF channel).

3. Fixing conditions. The contract writes the bet to the state and generates the 'BetPlaced' event (address, amount, game, timestamp).

4. Getting randomness.

Commit-reveal: Casino posts secret hash in advance, later reveals it. The player/contract checks for compliance.

VRF: the contract asks the provider for a random number + crypto evidence, which is checked online.

5. Prank. The function'settleBet (...)' calculates the outcome, checks the/house edge coefficient and counts the gain.

6. Payout. The contract transfers the prize to the player's address ('Payout' event). Optionally withholds commission/tax, updates limits.

7. Logs and metrics. All steps go into events ('BetSettled', 'RandomnessRequested/Fullfilled', 'JackpotHit') - they can be analyzed by a dashboard.

3) Random numbers and "provably fair"

Commit-reveal. The operator publishes a secret hash (commit); after the bet reveals a secret (reveal). The contract checks the hash → excludes backdating. Often add player salt (client seed) + server salt (server seed) so that both sides influence the result.

VRF (Verifiable Random Function). Onchain verification of evidence: the contract makes sure that the number is really random and obtained from the declared source.

Hygiene of chance. Disposable seats, periodic rotation, protection against reuse, storage of hashes and timestamps.

4) Bank management and house edge

Limits. Maximum on Bet/Player/Round, Day Caps, Anti-Vale Defense.

House edge. Encoded in the rules of the game (for example, 1-3% for dyes/coinflips, higher for slots).

Jackpots. Cumulative pool with a share of each bet; trigger conditions are fixed in the code.

Cross tokens. A contract may accept multiple assets; prices are normalized through oracles (risks: delays and manipulations).

5) Bonuses, vager and referral payments

Bonus balance. Stored separately from "real" funds; output is allowed after executing the vager (for example, x20).

State bonus machine. States: 'Granted → Active → Locked → Cleared/Forfeited'. Conditions and transitions are transparent in the code.

Affiliates. Interest on net income/turnover is recorded by the event; payments - periodically from the cash register.

6) All-on-chain vs hybrid model

Completely on-chain. All logic in smart contracts (transparency to the maximum; cons - gas, delays, load).

Hybrid. Bet/pay on-chain, and heavy logic and interface - off-chain; the result is confirmed by VRF/signature. This reduces gas and improves UX.

7) Risks and how they are covered

MEV/front-running. The attacker tries to insert his transaction between the bet and the draw. Measures: delayed disclosure, commits, private mempools, batch setters.

Oracle risks. Delays/failure/source manipulation. Measures: proof check, backup channels, limits on dependent games.

Upgrades and trust. Often use a proxy pattern (Upgradeable). You need Timelock + multisig to change the logic and a whitelist of roles ('owner', 'pauser', 'treasurer').

Errors in the code. Audits, bounty programs, formal verification of critical parts.

Liquidity. The bank needs buffers for maximum winnings, otherwise payments will be delayed.

Gas and UX. On L1, bets can be expensive. Solutions: L2, metatransactions, butching, gas aggregators.

Compliance. Country locks, limits, self-exclusion, age verification - often implemented off-chain, but "flags" are stored in the contract.

8) What the player can check (on their own)

Contract addresses. Check in the interface and the network browser; check the verified source.

Events. See'BetPlaced/Settled 'if the sums and coefficients match the interface.

Chance. Whether there is a commit-reveal/VRF, whether hashes and disclosures are published, whether evidence is validated.

Roles and upgrades. Who is the owner? Is there a 'Timelock', a multisig, a'pause'?

Limits and bank. Box office size, daily payment limits, jackpot frequency.

Approve/permissions. Recall extra 'approve/permit' after the game.

9) What should the operator do (minimum)

Audit and test. Public report, deployment on test network, bounty.

Timelock + multisig. Any upgrades are only through delay and collective signature.

Monitoring. Online alerts for liquidity, VRF responses, rate/payment anomalies.

Liquidity provision. Buffers for worst-case scenarios, rebalancing strategies.

Transparency. Public addresses, documentation, coefficient formulas, bonus/vager policy.

Player protection. Limits, timeouts, self-exclusion, KYC where required by law.

10) Frequent questions

Is it possible to "tweak the RNG"? If the commit-reveal/VRF is correct, no: any deviation is visible from the evidence. Risk - only in incorrect integration.

Why do I need a proxy/upgrade? To fix bugs and add games. But the upgrade should be with Timelock and multisig.

Why is the game sometimes "expensive"? Gas L1. Play on L2/during low load periods or use projects with butching.

Why is a hybrid worse than a full on-chain? More trust in the backend, but cheaper/faster. Compensation - VRF, transparent logs and hard limits.

11) Player checklist

The contract and source are verified, the addresses are the same as the site.
There are commit-reveal/VRF and public draw events.
Rate limits are visible, cash is sufficient for payments.
'approve'permissions are limited to amount/time; superfluous - withdrawn.
Test bid passed correctly.

12) Operator's checklist

Audit/bounty/testnet passed; critical paths are covered by tests.
Timelock, multisig, 'pauser/treasurer' roles are separated.
VRF/commit-reveal are implemented correctly, the seats are rotated.
Bank limits/capitalization are adequate to the risks.
Documentation and contract addresses published, support responds.

Smart contracts make casinos verifiable: rules are hardwired into code, randomness is provable, payments are transparent. The main thing is the correct architecture (RNG, bank, upgrades, limits) and security discipline. Players receive verifiability and quick payments, operators - automation and audience trust. The balance between "clean" on-chain and hybrid is chosen based on gas and UX, but in both cases the foundation is open contracts and reproducible evidence of honesty.