Sports betting is one of the biggest businesses in the world and according to statista (The Statistics Portal), the market volume of online gaming was forecasted to reach 51.96 billion U.S. dollars in 2018, more than doubling since 2009. More and more people are involved from all around the world, especially new players are coming from Africa and Asia. For example in Nigeria around 60 million people are involved in gambling activities and in South Africa around 50% of population is involved in sports betting.
STATISTA (Size of the online gambling market from 2009 to 2020 (in billion U.S. dollars)
Local shops were popular and they still are, but they are slowly replaced by online betting sites. With dynamic odds and internet, this is something we would expect anyway. Odds can change every minute and the odds are the key, because they represent the prices which bettors must pay. In many cases odds can be the difference between winning and losing. For bettors it is important to get the best possible price. Online betting gives us the chance to have multiple bookmakers accounts and because of that we can always get the best odds available. With the internet more and more people move from local bookies to online betting sites. And this make sense.
Because of that, more and more online bookmakers are born every year too. It is a huge business and if we understand that 98% of people lose all the time, this is great business opportunity for many betting companies.
We can easily say, that this is global phenomena and it is not just big business, but massive business. Because of that, everything is also not perfect, there are always some authorities, who want their piece of cake, there are banks and transactions fees, taxes,… and at the end the biggest price is paid by bettors.
This is why I recommend, that we start at the beginning and understand the problems faced by bettors and betting sites (bookmakers).
After we get this answer, then we can start talking how can bitcoins and blockchain technology make sports betting more friendly to both – bookmakers and bettors.
Let’s start with bookmakers and separate them in two groups.
In the first group are illegal bookmakers. A lot of times those underground bookmakers are run by criminals. They avoid taxes, run illegal activity and bettors money is never 100% safe. Most people don’t want to deal with them, but they still bet there because they simply don’t have other chance to bet somewhere else. Government agencies will take the actions to find both bettors and bookmakers. In some countries gambling is strictly prohibited. But still people will find the way how to gamble. They must trust their money to those bookmakers and if they decide, that they will not pay them, they can not do anything about this.
In the second group are legal bookmakers and we see more and more new online bookmakers every year. They will face all kind of country restrictions by governments, big transaction fees and when there are online transactions, there is almost always a problem with security.
What about bettors?
Every online business will bring some concerns. And the same is with sports betting. Bettors must always provide their personal information, information about their credit cards and in general online transactions have high fees and are slow. Security is questionable very often and at the end we have our governments that will try to limit our gambling/betting activities. Because of that bookmakers also close the door to many bettors.
Here is the example, what kind of information you need to provide to Bet365 (fiat bookmaker) if you want to open an account:
All those problems will be faced by bettors. And this is not the end. Some bookmakers don’t even pay, when you win and most of them will limit winning players. But there was no alternatives, this is why bettors stick with those betting sites.
So, the question is, what if there is a way to improve security, reduce cost of transactions, speed up transactions and at the same time allow bettors to bet anonymously on betting sites from all over the world. What if there is a way, where you don’t need to be afraid, that bookmakers will not pay you? What if there is a way to improve the trust between bettors and bookmakers?
And here blockchain technology steps in…
A blockchain is a digitized, decentralized, public ledger of all cryptocurrency transactions. Users are in full control of their information and transactions, database can be shared without central authority.
How can blockchain and cryptocurrencies improve sports betting world?
First of all, bettors can bet anonymously, without providing any personal information. There are already couple of bitcoin bookmakers, where you can bet anonymously. Here you can see how easy is to open an account at Nitrogensports, where you can create your account without giving away any personal information.
To open an account with bitcoin bookmaker you don’t need to provide any personal info:
This gives bettors anonymity and because of that their government authorities don’t know, that they were betting on sports.
Secondly, transactions are instant, cheaper and more secure. Blockchain brings transparency to all transactions.
And thirdly, smart contracts allow fair resolution of bets and payouts to occur automatically.
Because of that, bookmakers will gain more trust. Because of cheaper transactions, their operating costs will be lower and because of that they can offer better odds too. With no country restrictions, those bookmakers will have much bigger pool of bettors and because of that they can also offer much more sports events. I also believe, that those bookmakers who will not adopt to new situation, will not have any chance against new fair online bookmakers which will be based on blockchain technology.
The first step in right direction is made, there are couple of very good bitcoin bookmakers out there, where you can bet without providing your personal information. I see huge difference between old traditional bookmakers and new bitcoin bookmakers.
But we must separate bitcoin bookmakers from some fiat bookmakers, that accept bitcoin payment method.
Strictly bitcoin bookmakers are those bookmakers, where your account balance is held in bitcoins.
There are also some other bookmakers, especially offshore bookmakers, that will accept bitcoin as a payment method. But your account balance is not held in bitcoins, but in dollars.
The question is what are the benefits of bitcoin bookmakers – those bookmakers, where your account balance is held in bitcoins:
Instant deposits and withdrawals
Deposits and withdrawals are made very quickly. We are talking about minutes, seconds. Some betting sites accepts transactions with zero confirmations.
Zero to low fees
The fees are almost zero. We pay only small fees to miners, but we avoid all kind of transactional fees from banks or other “middleman”. On the long run this means a lot.
Bettors are sick of country restrictions. Pinnacle has good odds… but this is not helpful for US players, UK players and many others, because they simply don’t allow them to bet there.
A lot of bettors will switch to bitcoin bookmakers only because of this. You don’t need to verify your identity and send them all kind of your personal information including personal photos. Email and your username is enough to bet with bitcoin bookmakers. The same is with gambling sites. A lot of people want to stay anonymous when they gamble. Bitcoin bookmakers are perfect for this.
And the last and not the least important – one of the best investment opportunities right now
A lot of people don’t see the huge investment opportunity if they bet with bitcoins. Let’s say that you decide to take $10,000, divide this money on bitcoin bookmaker and fiat bookmaker (odds are the same, bets are the same). Let’s say also, that you will bet exactly the same bets at the same time on bitcoin bookmaker and fiat bookmaker. Let’s say, that you are skilled bettor and you will made 500 bets with the yield of 7% from January 2017 to November 2017. All bets will be the same (flat strategy) – $100.
What is the true difference if you bet with bitcoin bookmaker or fiat bookmaker, exactly the same bets with exactly the same starting bankroll?
If you make 500 bets with $50 per bet and the yield of 7%, you will make exactly $1750 of profit.
Starting bankroll: $5000
Bet size: $50 per bet
Total Risked: $50*500 bets = $25,000
Profit: +$1750 on 1st November 2017
On first January you decided, that you will turn $5000 into bitcoins and then you will bet with bitcoins until November (exactly the same bets than on fiat bookmaker).
Starting bankroll: 5.1795 BTC (1 BTC was equivalent to $962 on January 2017)
Bet size: 0.051975 BTC per bet (equivalent to $50 on January 2017)
Total Risked: 0.051975 BTC*500 bets = 25.9875 BTC
Profit: 1.819 BTC on November 2017
Profit in $: $11951 on 1st November 2017
But the price of bitcoin on 1st November 2017 was not $962, but $6570.
In reality this means, that if you bet with bitcoins, you would make almost 10 times more money than betting with fiat money.
Why is this so?
A lot of people see investing in cryptocurrencies as one of the best investment opportunities right now. The world is changing and digital currency will probably replace old currencies. The predictions show, that bitcoins could raise up to $100,000 in 2020.
So, if you have betting skill and if you can combine this with crypto investment, you can make 10 times more money than betting on fiat bookmakers.
And those are the benefits to bet with bitcoin bookmakers. The time is now. I have great experience with bitcoin bookmakers and I have no problems with withdrawals. Bitcoin bookmakers like Nitrogensports, Cloudbet and Lunarbets already offer much better odds than most other fiat bookmakers.