Online gamblers have wagered around 45 million euros on the Rugby World Cup in the first three weeks of play. In August, a record number of women worldwide bet on the FIFA Women’s World Cup in football, the most watched women’s sporting event in history. Last year, a whopping $35 billion (that’s with a “b”) in bets were placed on the men’s tournament.
Since its online introduction in the 1990s, the age-old practice of sports betting has spread around the world and is in the midst of a boom. While this is a boon for the industry, it also requires that responsible companies take steps to ensure that customer needs are not trampled in the rush for profits.
We can make that possible with blockchain technology.
The total sports betting market, now worth an estimated $85 billion worldwide, is expected to grow by more than 10% per year between now and 2030.
This growth benefits from a series of tailwinds. Jurisdictions across the West are legalizing online gambling, despite recent moves by regulators in the United Kingdom, Australia, Canada and elsewhere to tighten the reins. And in developing economies like India, growing internet penetration and the emergence of a young, tech-savvy and affluent middle class are fueling expansion.
Adding to this story is a surge in investment in major sports, adding polish and sophistication to everything from football to cricket. Owning sports leagues and teams is gaining credibility as a sound investment for investors around the world.
Conflicting interests – Profit versus customer interest
While it makes absolute sense for companies to capitalize on this popularity, many sports betting companies are so eager to maximize their margins that they neglect the interests of their customers. I believe that with blockchain technology and new ideas we can rebalance the playing field, making it both fairer and more fun for users.
Currently, many of today’s sports betting companies operate with too much opacity and rely on arbitrary rules to curb gamblers’ winning streaks.
While promoting responsible gambling and supporting players are important initiatives, some rules are simply designed to maximize profits. Take the betting shops that limit the potential earnings of customers who win too often, or even limit or block access to services.
Leveling the playing field
Restricting access is completely understandable if you suspect fraud or other illegal activity. But often companies go to extremes and place limits on whoever wins, or who wins too much for their comfort.
In traditional financial services, where I started my career, we didn’t have that luxury. Some of our best and most important customers were also the most adept at entering the market. It was up to us to manage that portfolio risk ourselves, without trying to limit their activities.
Enter Blockchain
Blockchain technology, the innovation behind the decentralized internet, can make this possible – when paired with the right policies and practices.
First, using a distributed ledger makes the flow of capital more transparent, allowing bettors to see what is happening within a sportsbook. Investors in traditional markets have access to much more data and higher quality information about movements than those who bet on sports. In the long run, that kind of access can make the difference between getting ahead and falling at the last gate.
Secondly, blockchain enables self-management of assets, making tracking easier and protecting gamblers from fraud and theft by less scrupulous operators. And under some models, gamblers can reap some of the rewards once reserved exclusively for the sportsbook.
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Making gamblers ‘the house’
Finally, blockchain enables a new twist on a very old game by allowing gamblers to take on the role of the sportsbook – or “the house,” in industry jargon – for the first time.
Sportsbooks have two major advantages over the average gambler. The first lies in the opportunities they provide. The difference between what the industry calls “real odds” and the odds a sportsbook offers users is known by many names depending on where you live. But whether you know it as “vigorish,” “vig,” “take” or “hold,” it boils down to the same thing: the sportsbook’s financial edge.
Sports betting will continue to grow
Based on its growing popularity around the world, it seems clear that online gambling is destined to become an everyday way for users to engage in major sports, with a growing number of sportsbooks entering the scene and competing for margins .
That’s why it’s all the more important now that responsible providers think carefully about how they can create a fairer – and more enjoyable – future for everyone. With blockchain technology and its benefits, we have the opportunity to reshape the playing field and vastly improve the gambler’s experience.
And that’s something worth betting on.