(Note: Neither PBSA nor StreamersEdge are involved in esports betting; the following is simply a collection of thoughts and observations on one of the buzziest topics in the industry.)
The PBSA team has been on the road for the past few months, attending a series of esports conferences and discussing the future of the space with some of the sector’s brightest minds.
With the announcement of StreamersEdge earlier this year, it is important we have our finger on the pulse of the esports community, and these conferences provide an ideal platform to exchange ideas, build our network and showcase our work.
While each show has had a slightly different focus, one common theme throughout was the sheer scale of the opportunity for innovative new products which allow users to place wagers on esports events.
But what is also clear from the numerous discussions we have had is that there are still a number of issues that must be resolved to ensure this part of the esports industry can grow in a sustainable and responsible fashion, and to the benefit of all.
Place your bets on esports?
According to research from NJGames.org, the total amount bet on esports competitions will hit $12.9 billion in 2020, making esports the fastest growing betting vertical in the world.
For all the revenue opportunities associated with esports, betting already appears to be the most lucrative.
However, growing a relatively new sector in a sustainable manner is a huge challenge — and there have already been a few bumps in the road.
In August, six men were arrested by Australian police for alleged match-fixing in a CS:GO tournament. Meanwhile, back in 2016, one of the world’s top Starcraft players was arrested and prosecuted for deliberately losing two matches in a betting related incident.
While more established, traditional sports have independent bodies and regulators to oversee betting activity and keep games fair, esports is still looking at ways to bolster integrity.
It is natural that this process evolves over time, and we are particularly encouraged by the work of organizations such as the Esports Integrity Commission.
But at the same time, it is critical that we have full and frank discussions about the risks, and how we best go about addressing them.
Good governance, the blockchain way
It is clear that to ensure esports betting grows responsibly, good governance is required.
How we achieve this was the subject of many discussions in the conferences we’ve attended over the past few months.
Of course, there is no simple answer to this question. Instead, it involves the entire community working together, alongside gaming regulators, event organizers, players, integrity bodies, betting companies and data providers.
But within this process, we see a significant opportunity for blockchain technology to play a central role in the future governance of esports betting.
It requires a huge amount of cooperation, trust and data-sharing between stakeholders to maintain esports integrity and guarantee that wagering on events is fair.
Blockchain-based systems, such as that operated by Peerplays, are the best way to build decentralized networks that guarantee fairness and transparency.
What does this mean from a practical point of view?
Well, there are countless ways this technology can be leveraged to create greater integrity within esports.
For instance, blockchains can be used to instantly capture and immutably store vast amounts of data, which can be shared with and analyzed by regulators to make sure competitions are fair.
This technology can also be used to decentralize processes such as confirming the results of esports matches via oracles.
From a betting and gaming perspective, blockchains can deliver provably fair wagering and greater custodianship of funds for the user, alleviating the risk of having money stolen by bad actors posing as legitimate betting sites.
These are just three examples of how blockchains can used to join the dots between esports, betting, and integrity, but we expect to see many more emerge over the coming months and years.
Taking the next step
The challenge we all face now is making sure these issues are taken seriously, and that the best solutions are implemented sooner rather than later.
The temptation for those early movers within the esports betting space will be to ignore these challenges in favour of short-term gains.
The speed at which esports betting has grown over the last few years, some will argue, is evidence that we are doing things right.
But we need to think about the bigger picture.
To cultivate a sustainable future for this industry, we need to regulate appropriately. And we need to make sure the best tools for this job are put to use immediately.
If our discussions on the road over these past few months are anything to go by, I expect blockchain will have an absolutely central role to play in this process.