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Sports Betting- A term that sounds thrilling, adventurous and entertaining all at once. Sports betting refers to one of the most popular kinds of gambling in which people place bets on events through predictions and earn money upon winning.
There are many sports that allow sports betting such as football, cricket, basketball, golf, horse racing etc. Over the course of time, land-based sports betting is being accompanied by online sports betting platforms as the internet is swiping new generations off of their feet.
In this article, we will take you through some basics of blockchain technology, address issues in online sports betting and how blockchain is revolutionizing sports betting payments.
There are many sports that allow sports betting such as football, cricket, basketball, golf, horse racing etc. Over the course of time, land-based sports betting is being accompanied by online sports betting platforms as the internet is swiping new generations off of their feet.
In this article, we will take you through some basics of blockchain technology, address issues in online sports betting and how blockchain is revolutionizing sports betting payments.
What Is Blockchain Technology?
Blockchain technology is like a super secure way to share information in a business group. It stores all the information in blocks that are linked in a chain. You can’t change the chain without everyone agreeing. So, it’s great for keeping track of stuff like orders, payments, and accounts because no one can mess with the records. It also stops anyone from adding fake information or data and makes sure everyone sees the same thing.
Sports Betting And Digitization
The sports betting market was predicted to grow at a CAGR of 8.62% between 2018 and 2022. New predictions suggest that the market size by 2027 will be $765.89 million followed by $847.54 million by the end of 2032.
Blockchain in sports is gradually becoming a major player in the sports gambling industry. The upgrade in internet services, especially from 4G to 5G and counting, has made accessing any platform easier, giving the market an opportunity of steep growth.
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Issues In Online Sports Betting
Although online sports betting has gained immense popularity by far, there are some major issues that need to be addressed with some technological advancements.
Have a look at the pain points!
Have a look at the pain points!
Liquidity
Liquidity has been a major struggle for both the players and the bookmakers. Most traditional sportsbooks work on a centralized basis, i.e., users deposit a predetermined amount of money into their account wallet to place their bets. As a result, users’ funds are frozen for an indefinite period of time with no interest.
Lengthy Payment Process
The traditional sportsbook mostly involves a lot of steps and/or actors before conducting the final payout. This includes involvement of the company, the customer, KYC procedures and last but not the least, the payment gateways. Thus, the time taken for the final payout following withdrawal request is a lengthy process.
Fee Deduction
During the transaction, a large portion of the money transferred is collected as a fee by the payment gateway. Furthermore, when the money is returned to the player, they have to pay the tax for it, leaving them with less money in their account. Because of this complicated process, the player is left with much less money than what he or she was entitled to.
Higher Cost
For business operations, costs for operators are on the rise and a significant portion of these costs are for financial reporting, resulting in lower margins for operators. Higher costs can create barriers to entry for new bettors, particularly those with limited financial resources.
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How Do Blockchain Solve The Issues?
With the inclusion of blockchain technology, the aforesaid issues relating to traditional online sports betting platforms can easily be addressed and solved.
How? Dive a little deeper:
Payment In Tokens
Blockchain allows for efficient payment processing with tradable tokens for commodities, loyalty points, and cryptocurrencies. Online sports betting platforms can create specific tokens for transactions, increasing their value based on usage for higher profit margins.
Fast Transactions
Blockchain allows for almost real-time transactions, so deposits and withdrawals are done almost instantly thereby reducing the waiting times of the players or users.
Minimal Fee Deduction
Blockchain transactions charge minimal fees and players do not need to pay tax for crypto payments in certain jurisdictions.
Security
The decentralized nature of blockchain makes the blockchain sports betting platforms very secure. It prevents fraud, hacking and manipulation of game results or financial transactions.
Final Thoughts
Blockchain technology stores information in blocks that are linked in a chain and cannot be manipulated by any third party. It comes with a lot of benefits that can increase more targeted users and retain them on the sports betting platforms for a longer period of time. With the traditional online sports betting platforms, there are a couple of issues in online sports betting, such as liquidity, lengthy payment processes and more. However, with the inclusion of the Sports betting on blockchain, it is evitable that all these issues are addressed and solved perfectly.
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Frequently Asked Questions (FAQs)
Blockchain technology has made sports betting simpler and more secure. It allows for quicker, more secure, and cost-effective transactions using various forms of digital currencies. Users can manage their funds within their own digital wallets, and all transactions are traceable and transparent.
As of now, there is no federal law regarding crypto sports betting in the US.
A blockchain-based book can significantly improve bettor protection in these types of situations by creating a trustless ecosystem. By integrating blockchain technology, all parties benefit from the permanent record of a verifiable, unchangeable transaction ledger. By allowing market data to be shared through an incentivized network, bettors can be rewarded for contributing data. This helps operators with a lower bottom line cost. Additionally, there is fairness in gambling sessions.
Blockchain in sports can be used to manage fan loyalty programs, issue fan tokens, verify memorabilia, simplify ticketing, and create digital collectibles.
Yes, blockchain in sports betting will be widely in use in future. Blockchain-based platforms enable fans to interact directly with sports teams and players, creating one-of-a-kind experiences. Tokenization allows fans to own digital assets, including collectibles, branded content, and virtual shares of sports teams.
Even without the use of cryptocurrencies, blockchain holds great potential for secure and fast payments. DeFi (Decentralized Finance) and smart contract systems are exploring new ways to streamline payment processes, which could revolutionize the way players interact with online sports betting and online casinos.
A decentralized network eliminates the need for multiple middlemen. A payment is verified in real time against the information stored on a blockchain. The new transaction is then added to a block and added to the chain.
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