Online bettors wagered some 45 million euros on the Rugby World Cup in just the first three weeks of play. In August, globally, a record number of women bet on the FIFA Women’s World Cup in soccer, the most-viewed women’s sporting event in history. A staggering $35 billion (that’s with a “b”) in bets were laid on the men’s tournament last year.
Since it shifted online in the 1990s, the age-old practice of betting on sports has spread across the globe and is in the midst of a major boom. While this is a boon for the industry, it also demands that responsible companies take steps to ensure that the needs of customers are not trampled in the stampede for profit.
With blockchain technology, we can make that happen.
Blockchain Technology and Sports Betting
The total sports betting market, now worth an estimated $85 billion globally, is expected to expand by more than 10% a year between now and 2030.
This growth is benefiting from a range of tailwinds. Jurisdictions across the West are legalizing online betting, despite recent moves by regulators in the United Kingdom, Australia, Canada and elsewhere to tug on the reins. And in developing economies such as India, growing internet penetration and the rise of a young, tech-savvy and moneyed middle class is fueling expansion.
Adding to this narrative is a surge in investment in major sports, which is adding gloss and sophistication to everything from football to cricket. Increasingly, ownership of sports leagues and teams is gaining credence as a sound investment for investors all over the world.
Conflicting Interests - Profits vs. Customer Interest
While it makes absolute sense for businesses to capitalize on this popularity, many sports betting companies are so eager to maximize margins that they are disregarding the interests of their customers. I believe that with blockchain technology and new ideas, we can rebalance the playing field to make it both more equitable and more fun for users.
At the moment, many of today’s sports betting companies operate with too much opacity and rely on arbitrary rules to rein in bettors on winning streaks.
While promotion of responsible gambling and player support are important initiatives, some rules are designed simply to maximize profit. Take the betting shops out there that will cap the potential earnings of customers who win too often, or even limit or block access to services.
Levelling the Playing Field
Limiting access is completely understandable in cases where you suspect fraud or other illegal activity. But often companies go to the extreme and place limits on everyone who wins, or who wins too much for their comfort.
In traditional financial services, where I began my career, we didn’t have that luxury. Some of our best and most important customers were also the most adept at engaging with the market. It was up to us to manage that portfolio risk ourselves without trying to limit their activity.
Blockchain technology, the innovation behind the decentralized internet, can make this possible – if coupled with the right policies and practices.
First, its use of a distributed ledger makes the flow of capital more transparent, allowing bettors to see what’s going on within a sportsbook. Investors in traditional markets have access to far more and higher quality data and information about movements than those who wager on sports. In the long run, that kind of access can make the difference between coming out ahead and falling at the last fence.
Second, blockchain allows self-custody of assets, making tracking easier and protecting bettors from fraud and theft by less scrupulous operators. And, under some models, it can allow bettors to reap some of the rewards once exclusively reserved for the sports book.
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Making Bettors "The House"
Finally, blockchain makes possible a new twist on a very old game by permitting bettors to, for the first time, assume the role of the sportsbook – or “the house”, in industry parlance.
Sportsbooks have two major advantages over the average bettor. The first lies in the odds they offer. The difference between what is referred to in the industry as “true odds” and those a sportsbook offers users is known under many names depending on where you live. But whether you know it as the “vigorish”, “vig”, “take” or “hold”, it amounts to the same thing: the sportsbook’s financial edge.
Sports Betting Will Continue to Grow
Based on its growing popularity across the globe, it seems clear that online wagering is destined to become a commonplace way for users to engage with major sports, with a growing number of sportsbooks arriving on the scene and jostling for margin.
That’s why it’s all the more important now for responsible providers to think hard about how to create a more equitable – and enjoyable – future for everyone. With blockchain technology and its advantages, we have an opportunity to reshape the playing field and vastly improve the experience of the bettor.
And that’s something worth betting on.