If there’s something in common between the sports gambling and digital currency industries, it’s their growth potential and the market interest they attract. Despite global economic issues, sports gambling continues to thrive and evolve. This market remained substantial amidst being slowed down by restrictions the worldwide COVID-19 pandemic brought. As regulations ease, experts expect the numbers to rise exponentially in the years to come.
In the United Kingdom alone, the UK Gambling Commission valued the industry at GBP£12.7 billion in 2021. Apart from this, adult gambling participation rate in the UK is at a strong 43%, showing significant market interest in this form of leisure.
Meanwhile, sports betting has skyrocketed online, and one area that experienced substantial growth is the crypto gambling scene. Every month, you get to read stories about superstars and icons like Drake winning a million dollars betting on teams like the Golden State Warriors in the National Basketball Association (NBA) using online betting platforms like Stake.com, which primarily deals with cryptocurrencies.
If you’re curious or excited about what’s next in crypto and sports gambling, there’s a lot happening behind the scenes. In this article, you’ll learn about the future of blockchain in the world of sports gambling.
The rise of crypto casinos
According to US-based market research and consulting company Grand View Research, they expect the global sports betting market to grow exponentially, potentially peaking up to USD$182.12 billion (GBP£162.93 billion) in revenue by 2030. While the industry continues to expand, online betting companies have yet to find a satisfactory resolution to a few issues to improve customer experience.
Over the years, bettors have continuously raised issues about delayed or rejected payouts, high transaction fees and commissions, account limitations and others. Considering how these concerns can discourage patrons from engaging with a gaming site, finding a solution should be at the forefront of an online casino’s priorities.
Amidst these challenges came blockchain technology, providing online casinos and gamers with solutions to these issues. Through blockchain, players can break out of the traditional ways of accessing and transferring funds, thereby improving their gaming experience. Nowadays, more and more gaming platforms have started adopting blockchain and crypto into their systems.
Sports gambling newbies and old-timers alike are sure to recognize online betting giants Stake.com. Stake is one of the first online casinos that hosted cryptocurrency transactions. None can overlook this site’s relevance in the sports gambling, as the company has recently partnered with the European Cricket Championships, which will run from September 12 to October 14 in Malaga.
At present, Stake.com hosts 18 different cryptocurrencies and continues to enjoy popularity among gamers by offering just about every table game a traditional casino offers. There has been a lot of coverage in recent years on how blockchain has a big future in sports betting, and with the unique properties of this technology, so it’s easy to see why. Suffice to say, crypto has eked its place in online betting.
Defining blockchain technology
Blockchain technology works like a universal ledger that everyone in the network can access and manage. However, encryption protects every entry into the system, safeguarding it from unauthorized access. The blockchains are formed with this data that multiple users can access.
All the changes made in a blockchain system are stored and replicated in many databases. Each database will be updated if any changes are made. It means the blockchain records and encrypts all transactions permanently. With this level of security, there are no third parties or intermediaries such as banks or traditional financial institutions involved in blockchain transactions. Also, data updates within a blockchain are completed in a matter of seconds.
Here are other facts about blockchain technology:
Data permanency
As said, any data entered into the blockchain system will be permanently recorded on the space, and anyone who is already in the network has access to these records. Removing data from the blockchain is next to impossible since they’re supported by multiple layers of hashes and replicated in all the nodes supporting the block. These nodes can track changes, making them visible to anyone on the network.
Incorruptibility
As all authorized members have access to the blockchain data, the system will notify everyone on the network on any changes to the system. Because of this centralized validation system, the data becomes incorruptible since any changes to the chain requires everyone’s permission. Also, any changes made becomes traceable, promoting accountability within the community.
Data security
The blockchain system is designed to make it nearly impossible to hack into. A hacker might need several days or weeks to find the correct hash codes and combinations that serve as a shield for the data they want to access illegally. Aside from the cryptographic fingerprint, getting approvals from all the people on the chain can be near impossible, making it even more challenging to break into the system or tamper with data.
Access limitations
While there are public blockchain networks where everyone can access their data, users also have the option to create a private network with limited access. You can select participants you want to add and give them access with varying degrees of authorization.
Because the data in blockchain technology is nearly impossible to corrupt, the system became ideal for industries dealing with financial transactions, such as sports gambling.
Advantages of cryptocurrency in sports gambling
Almost all casinos accept crypto for betting due to the value it offers for patrons and gaming houses. Here are some of the advantages of using crypto in sports gambling:
Fewer restrictions
One significant advantage of using crypto in gaming transactions is the lack of geographical restrictions, making funds easily accessible anywhere, anytime a patron wants to play a game. With a crypto wallet, a customer can place bets in the comfort of their homes.
Not only are gamers unhindered by their location, users can transact cryptocurrency freely across platforms without third-party regulations. Unlike fiat money, restrictions may prevent players from moving specific amounts of funds on a given transaction or for a particular purpose.
Depending on the casino’s regulations, players might have particular requirements to meet when accessing winnings. Since everything is done virtually, gaming sites must verify accounts and documents before releasing winnings. However, withdrawal limits are rarely imposed, and winnings are almost always readily accessible.
Confidentiality and security
Crypto platforms also allow anonymity with each deposit and withdrawal. You can purchase cryptocurrencies without disclosing personal information or sharing pertinent documents. Some players can even opt to play anonymously if they like.
Besides anonymity, players can enjoy the safety and security offered by transacting through crypto channels. Using blockchain technology, clients can enjoy transparent, traceable and irreversible transactions recorded in an open-source ledger beyond government or bank regulations. Hence, players can fully control their digital currency because no one can access them without authorization.
Accessibility and convenience
Crypto gambling pushes for more convenience as patrons won’t have to rely on traditional funding methods such as cash or credit cards. The players will only need internet access, a device and their crypto wallet ready to start betting. They also won’t have to worry about withdrawal and deposit limits or clearing periods for bank transfers and check deposits.
Simpler, faster transactions
Time is of the essence in online betting, so players need quick, hassle-free financial transactions to place bets or collect winnings. The faster they can fund their games, the quicker they can join a table or make decisions on where to put their money. All in all, faster financial transactions benefit players and the betting site.
There are many other ways cryptocurrency improves the experience of sports gambling enthusiasts and even those trying their luck for the first time. As crypto casinos offer freedom and flexibility that they can’t find on traditional sports betting platforms, it has become the standard in gaming.
Downsides of blockchain technology in sports gambling
While blockchain technology offers many benefits, there’s still room for further development and that any system has a set of limitations or drawbacks. Also, even though the technology behind blockchain is solid, the possibility of misuse remains. For one, some companies can pose as legitimate cryptocurrency developers and promise returns to investors without a concrete business plan.
In this case, shady companies and projects rely on the prominence of blockchain technology to lure others into investing their money on their platform. For one, the sports gambling community might become a prime target by these scams as it’s easy for users to encounter dubious offers while doing crypto transactions. Hence, it’s one downside that players should be watchful of.
Besides this example, here are other disadvantages of using blockchain technology in sports gambling:
Costs
There are costs associated with transitioning from traditional payment methods to blockchain technology. For one, a gaming company would need to hire consultants and specialists who can help implement the changes in their operations, especially where blockchain is the focus. The expansion of the workforce would also mean added costs for labour.
Aside from hiring new personnel, companies may also require training for their existing employees. Specialized training is needed to ensure a smooth transition and effective implementation of blockchain technology in their day-to-day activities. Hence, a company must also allocate funds for this endeavour.
Meanwhile, sports betting patrons should also be financially prepared if they want to start using crypto in their transactions. The world’s first cryptocurrency, Bitcoin, has reached an all-time high price of USD$68,990.90 (GBP£61,720.29), with other forms of crypto close behind. Considering the present market value of most major decentralized currencies, players must prepare themselves to make substantial investments to fund their gaming activities.
Familiarity and ease of use
One critical factor to consider when using blockchain technology for sports gambling is customer experience. While it’s widely popular worldwide, not all players are well-versed with cryptocurrency and other digital assets. This might make them hesitant to use blockchain-based platforms.
The Massachusetts Institute of Technology (MIT) Bitcoin Club has proven that knowledge about cryptocurrency has yet to reach public awareness. The study was conducted on around 5,000 undergraduate students at the said institution. After being given USD$100 (GBP£89.43) in Bitcoin, 50% of the respondents lacked an understanding of the currency’s actual value and how to utilize it to their financial advantage.
Sports gamers require at least a basic understanding of blockchain technology to optimize their investments and make wise purchasing, betting and withdrawal decisions. The learning curve may look different for each person. However, once understood, players are sure to enjoy the convenience crypto technology brings. Some essential processes players must learn include converting fiat money to crypto and creating a crypto wallet. They’ll also need to learn how to secure access codes and sync the crypto wallet to the gaming site.
Besides the players, those who work in the gaming industry must also keep up with the changes that utilizing the blockchain system can bring. It might be a huge step for everyone involved, though the advantages far outweigh the investment required. Also, knowledge about blockchain and crypto can be helpful in other ways, such as when looking for investment channels. Overall, knowing more about blockchain will benefit everyone in the long run.
Impact on job security in the gaming industry
The workforce has also been affected by recent technological advancements, including the growing presence of blockchain technology. Based on data gathered by Statista from 2009 to 2019, the number of betting industry employees in the United Kingdom has significantly dropped by a head count of approximately 9,000 within the said period.
While the sports gambling industry employs many, the workforce landscape may change significantly once blockchain technology becomes fully adapted in the field. Some of those who might get affected are sports booking employees and those in charge of verifying transactions.
Meanwhile, gaming houses and sports booking companies might benefit from reducing the workforce as they’ll also have to shoulder fewer labour and management costs.
Conclusion
Blockchain technology being the future of sports gambling shows significant potential, though there’s still a possibility of other technologies entering the industry in the years to come. The only certainty at this point is that blockchain technology has become prominent because of its advantages. Both players and casinos benefit from using its features, which promote safety, security, convenience and growth for the gaming industry.