How Blockchain Technology Became Involved with Sports Betting
Although it is a fairly new relationship, the one between blockchain technology and sports betting is not that surprising. Both have enjoyed an incredible increase in popularity in recent years and were relatively unaffected by the COVID pandemic that hit other industries hard.
With gambling laws around the world – and especially in the US – easing, there have been millions of potential new customers for online betting companies. The most popular sportsbooks have the best apps and they have tended to offer more advanced technology for a better service. That has regularly meant the acceptance of cryptocurrencies and payment methods and the use of blockchain.
There are some criticisms of how sports betting has embraced digital currencies so quickly. But it does seem as though these two areas will be connected for a while yet. Here is some of the backstory of how the betting world developed its blockchain technology.
Although sports betting gets a lot of attention when it comes to online gambling, the casino side of the operation is also big business – and in some cases has led the way as far as incorporating blockchain goes.
A number of online casinos have introduced the acceptance of digital currencies as payment methods and customers have largely been impressed with the results. The faster turnaround on transactions has been a major plus – and has shown the big sportsbooks that using blockchain and crypto could be the way forward when it comes to online sports betting too.
The main reason why online sports betting and casino operators have been so positive about the introduction of blockchain technology is that it really works for them. Obviously this would not work if there was no benefit for the customer as well. But using digital currencies and blockchain seems to be a win-win situation for all concerned.
Although gambling laws and restrictions have been eased in recent years, there are still location issues for potential customers. With a crypto wallet, those geographical problems disappear and allow individuals to take part in the betting wherever they are. The use of blockchain also allows for more privacy. There is no need to provide all the personal information that fiat currency payment methods require.
Being able to simply use a good internet connection to bet has been revolutionary for the industry. The speed of the transactions – both financial and the actual placing of bets – is also attractive to customers who are only too aware that the slightest delay in placing a bet could mean a lot of difference when it comes to potential returns.
Although both betting firms and customers may be quite happy for the industry to forge even stronger links with cryptocurrencies and blockchain, there are still also some drawbacks to consider.
One of the main issues is that much of this technology is still relatively new. There could still be some negatives to the partnership that have not already presented themselves. The relative inexperience could also cause security problems for users who are not as used to betting this way. Security is obviously very important when it comes to online betting, so the system needs to be foolproof for it to prosper.
Also, as much as we have mentioned the positive cost implications here, there are negatives here too. There would be very large bills for already established sportsbooks to start offering crypto payment options and using blockchain – and new operators can still find it hard to get a hold in the market.
There is also the employment aspect to consider. With a decentralized betting operator, there is not as much need to employ as many people to provide the product. That might sound cost effective to the betting companies but there is a moral question to consider.
There does seem to be a lot of scope for online betting to begin to become more involved with blockchain technology - in a variety of ways. But the main relationship between the two at the moment is simply allowing customers to bet using cryptocurrencies.
Much of the time the digital currency is exchanged into a fiat currency at the time of deposit anyway, so some of the benefits are not really passed on to the customer. This does mean that the financial risks involved are also avoided though. As more customers become familiar with using crypto, betting could become even easier for those willing to give it a go.
There seems to be no escape from NFTs when it comes to the digital world and betting companies are obviously keen to get in on the action. This has also meant that there have been more people attracted to the idea of using crypto for their betting.
The sports memorabilia industry has been quick to embrace NFTs. Where baseball cards used to be the holy grail, it is now NFTs issued by the sports stars themselves. There has also been a development in the use of NFTs as a payment method in itself. For customers interested in the NFT world, being able to use them as a transactional tool in this way only affords them even more value.
Using a decentralized autonomous organization (DAO) within sports betting is obviously beneficial for those already looking to build bottom-up community-led systems. The fact that it has infiltrated the betting industry is not a surprise – it just depends on how far DAOs will go.
We have already mentioned the fact that traditional sportsbooks could disappear entirely if DAOs became the common way of online betting. An open-source environment, where users could implement their own improvements, could make bookmakers obsolete. For those in the know that is an attractive concept. But it is not the same case for newcomers who may come from a more traditional background.
It does seem as though cryptocurrency is here to stay in the betting industry. How it develops and adapts will be interesting to watch. As much as DAOs seem like a much fairer – and personal – way of operating, it is unlikely that the current betting companies would stand by and let that happen.
There is also the fact that newer technology will be introduced in the coming years that may take over itself. Whatever the future holds, there is no denying that the gambling industry has completely changed in the last few years thanks to the digital world.