Getting Backstage of Online Sports Betting: Khabib and Conor Are Now On Blockchain
The biggest MMA event of the year was held this weekend. Lightweight champion Khabib NURMAGOMEDOV was defending his title against two-time champion Conor MCGREGOR at the T-Mobile Arena in Las Vegas. Before the fight, the pay-per-view buys was closer to 3 million and the number of wagers can be only imagined. We decided to analyze the sports betting market to figure out the most reliable bookmakers and the most efficient ways to make profits.
Almost every bookmaker, including William Hill, 10 Bet, bet-at-home.com, was considering Khabib a favourite in this UFC fight offering lower odds of 1,5–1,6 in comparison with the corresponding indicator for Conor, whose chances to win are poorer and therefore the odds are higher and suggested at the average level of 2,25–2,45.
The odds, by which users’ bets are multiplied, are the key indicator to evaluate possible proceeds. Sportbooks carry out a comprehensive analysis of statistics, collect expert opinions and use methods of probability theory to figure out the chances of each outcome. Afterwards to each probability, they add their profit margins to specify final odds that will allow them to generate revenues even in the case of the most unexpected result.
We decided to have a look at blockchain alternatives to see if they make different offers. The cryptocurrency gambling platform 1xBit provided similar rates of 1,545 for NURMAGOMEDOV and 2,625 for MCGREGOR.
As the statistics of previous matches by the fighters were quite easy to calculate due to a relatively small amount of baseline data of 40 fights in total, the odds amounts were quite the same. However, even a slight variance could make a significant difference when it came to big volume bets. So if we had betted $10,000 for MCGREGOR win, the successful performance by the Irish fighter would have earned us $22,500 with bet-at-home.com while 1xBit would have generated a profit higher by $3,750.
All gamblers have to understand that while they strive to make a good bet bookmakers, on the contrary, are eager to see them lose as their yields and business, in general, are built on clients’ failures. They are able to operate and pay winnings to one customers out of losses of others. Therefore, a betting company manipulates users’ behavior via certain odds and handicaps specification, promotions, staking level variation and limitation, etc. to minimize the chances of their success.
Imagine the situation when betting rates are based not on expert forecasts and statistics but are artificially formed by bookies. How can you make sure that the odds rates reflect the real state of affairs? Besides licenses received from regulators, there are barely anything else that can confirm the reliability of traditional betting companies.
Not only criminals or vulnerable customers, who cannot control their gambling thrill, can cause money laundering, but bookies themselves sometimes do not follow the standards of fair play. Under the pretext of a security policy, they may ban their users’ accounts with savings on them. As soon as the specified time period of a user not being active passes bookies embezzle users’ money. As one of the examples, the whole movement called Justice for Punters applied complaints to the UK Gambling Commission accusing William Hill of postponing payouts or not paying winnings to clients at all.
The possible solution to the problem of low security and trustworthiness lie in DLT. Transactions on a blockchain become transparent as all payments are recorded and can be verified by any member of the network.
In addition to fair payments, blockchain bookies ask for less personal data to be provided comparing to traditional requirements. There are even crypto betting platforms that offer a one-click registration. For instance, 1xBit generates login and password for you and send them on your email.
This approach is likely to get a warm welcome from the modern society that is currently experiencing negative sensations because of recent users’ data leakage allowed by IT-giants like Facebook. Non-crypto bookmakers have to follow strict KYC and AML standards imposed by regulators while DLT industry is yet to face systematic regulation.
Honesty and fairness are crucial issues for betting, however, is there any other advantages a DLT-bookie can provide? Although, entertainment and exciting sensations involve people in wagers, the main objective the majority of players pursue is to earn money using their sport knowledge. So are there any financial benefits offered by blockchain bookmakers?
Traditional bookmakers in comparison with blockchain-based ones offer a smaller range of categories for players to bet due to lower efficiency of transaction processing, which puts limits on users’ earnings opportunities. For instance, there were specific factors that could affect the final result of the fight such as takedowns that were more accurately executed by Khabib before the fight on 6th of October — 5 takedowns per match against maximum 1 by Conor.
As takedowns were NURMAGOMEDOV´s competitive edge 1xBit provided a virtual advantage in the form of handicap of +4,5 to his opponent, that was an underdog, to even the field.
So if we had betted another $1,000 for Conor doing a takedown and he had managed to deliver at least 1 against 4 by Khabib, we would have generated another $670 and our total earning would have amounted to $16,920. It would have been by nearly 30% more that we could generate with bet-at-home.com, for example.
It is worth mentioning that earnings should be accessed not solely by numerical figures but also by the efficiency of their utilization, which brings us to the liquidity issue. Traditional bookmakers charge fees for withdrawals and thus players, that want to do gambling for a long period of time, tend to keep their funds sitting on their bookies’ accounts. Bet-at-home.com allows first three withdrawals in a month for free while the rest are charged by a $5,76 fee for each transaction. Moreover, the company sets the maximum amount of withdrawal at the range of $5,762 — $11,524. Therefore, our profit with this bookmaker cannot be withdrawn at once, which limits its efficiency and make us miss out on other investment opportunities.
Blockchain-based bookies operate with cryptocurrencies and 1xBit accept payments solely in popular Bitcoin, Ethereum, Litecoin, Dash, ZCash and other 13 cryptocurrencies, with which transactions can be executed at higher speed due to lack of intermediaries that are typical for traditional financial sphere. What is more, the DLT-bookmaker does not require any commission fees for withdrawals and allow maximum amount of 120 BTC which accounts for more than $780,000 on 5th of October, which could enable us to withdraw all our revenues generated out of the fight at once without any losses and consequently create a wider range of opportunities for the asset gainings to be used.
After betting $10,000 for Conor´s win and $1,000 for him to execute takedowns, we could have obtained gross revenue in the amount of $16,920. With the help of the cryptocurrency platform and Mr. MCGREGOR, we would have earned 54% more than the amount of our initial possessions. Thus, traditional bookmakers have proved to be less efficient by 26% on the example of this highly expected sport event, which brings us to the main outcome of our analysis — implementation of blockchain technology can discover new potential in sport betting industry, boost it further growth and open new opportunities for players to make bets and generate revenues more productively.
However, as we know now, Conor failed the battle and did not even make a single attempt to do takedowns, so thanks God we did not have enough courage and faith to bet on him. Khabib won but did not take a trophy home as he could not control his temper. After finishing MCGREGOR in the 4th round with a submission, NURMAGOMEDOV rushed out of the octagon and scaled the fence to finish Conor’s sparring partner and jiu-jitsu coach Dillon Danis. Post-fights brawl on the first rows and in the octagon with Khabib’s team attacking Conor provoked organizators to punish the winner and not to award him with a belt. Moreover, UFC Cheif Dana WHITE does not rule out the possibility of Khabib being stripped of the title.
A question of winning payouts is arising for players. 1xBit points out that such controversial cases are always analyzed and under a thoughtful consideration and discuss: “It depends on several factors. The main one is the terms of the decisions. in this case, the decision was Khabib was a winner and wasn’t qualified”. Bookmakers are even happier with this rollout of the event as they can hold another round of bets. 1xBit is now accepting bets on the outcome of the situation.
While NURMAGOMEDOV’s actions caused a lot of controversy and judgement, even by his father, people like Yahoo Sports columnist Dan WETZEL consider this scandal be profitable for UFC: “Dana White has always walked this line trying to take the UFC and mixed martial arts from a rogue sport banned on pay-per-view and all but a couple of states, into real competition and a legitimate business. He’s been willing to cash in on the mayhem. He and the company he serves as president has, in turn, made billion of dollars”.
The post-fight controversy may initiate a fight-revenge that will no doubt become highly expected again and attract a lot of funds to UFC and bookmakers too. “The interest to UFC matches increased. The scandal gets this kind of sport more popular”, — says 1xBit representative. So, players, start to save up some money as its seems you may have another chance to strike gold