As a growing number of sports fans decide to put money down on their favorite events, crypto sports betting is quickly gaining popularity. Online bitcoin casino statistic tracker Bitcoin Strip analyzed data from sixty crypto gambling sites to find that people are placing a staggering 337 bets per second. And according to research conducted by Fairlay-a bitcoin prediction market and exchange- 90% of its volume is derived from sports betting crypto.
As I see a huge potential in crypto for sportsbooks, I will delve deeply into the current state of online crypto sports betting and its relationship to wagering with traditional currencies. And I’ll start with a quick overview of the most used cryptocurrencies.
The Most Popular Cryptocurrencies in Sports Betting
Although Bitcoin is the most known and has the biggest market share, over 2000 different cryptocurrencies are actively traded worldwide. Each has its values, purposes, and specific use. The following comparison table gives insight into the current standing of five excellent options to implement into your sportsbook:
When it comes to wagering, the core utility of any cryptocurrency is to provide a 100% reliable and cheap way to lawfully transfer money between betting providers and fans.
Advantages and Disadvantages of Crypto as a Decentralized Payment in Betting
There are several key differences between crypto sports betting and traditional betting. For one, sports betting cryptocurrency typically allows for much faster withdrawals than are possible when using traditional currencies. Secondly, crypto betting is often available without any fees, whereas conventional casinos usually charge gamblers for bank withdrawals. Lastly, the limits on withdrawals are generally more flexible when your winnings are paid out for cryptocurrency gambling.
Advantages for Bettors
1. Quick Transactions: Deposits and withdrawals made in crypto sports betting are completed in a fraction of the time it takes when using traditional currencies.
2. Safe Deposits: Cryptocurrencies are safe and reliable, without the problems of failed or declined transactions that may occur with traditional methods through banks.
3. Higher Limits: Many online sportsbooks offer both higher deposit and withdrawal limits for bettors using cryptocurrency.
4. Transparent Record: Once payments are sent, they cannot be altered or reversed from the way they are recorded in the public ledger.
5. Privacy: Crypto betting allows gamblers to retain full privacy, as their personal information is not attached to their deposits or withdrawals.
6. Universal Currency: Unlike USD or other fiat currencies, cryptocurrencies are accepted around the world without requiring exchanges.
7. Low Fees: By removing the need for third-party banks, crypto gambling sites often feature zero fees for deposits and withdrawals.
8. Bigger Bonuses and VIP Programs: Using cryptocurrency for betting comes with a wide range of bonuses and special programs that are not typically available when gambling with traditional currencies. These include sign-up bonuses, referral bonuses, and deposit matching programs. Though traditional currency bonuses are prevalent in the marketplace, crypto betting bonus rates are higher.
9. Not Subject to MO/MB Inflation: Cryptocurrencies are immune to the standard inflation rates of traditional currencies. However, the volatile crypto market is something to keep an eye on.
10. No Deposit Rejection: Since Bitcoin sportsbooks and other crypto sites do not use third parties for payments, the traditional annoyance of rejected deposits is removed from the equation.
Advantages for Sportsbooks
1. Increased Security: As cryptocurrencies are managed with blockchain technology, the possibilities of fraud and hacker interference are greatly reduced.
2. Cost Efficiency: The lack of third-party bank involvement in cryptocurrencies removes many traditional fees.
3. Strengthened Reputation: The exceptionally secure nature of cryptocurrencies increases bettors’ trust in sportsbooks.
4. Robust Data: Blockchain records can be accessed seamlessly to extract valuable data about the spending habits of gamblers and can be anonymized.
5. Providing Superior Customer Experience: Offering crypto transactions as an alternative option for bettors allows consumers to use their preferred payment and withdrawal methods instead of being forced to use traditional currencies for gambling.
While crypto betting is gaining popularity and the advantages are significant, several challenges remain.
Disadvantages of Cryptocurrencies
Relying on DataArt’s solid expertise working with sportsbooks worldwide, I can outline the following challenges when adding crypto to your betting business.
1. Lack of Regulation: Beyond the confines of blockchain technology, cryptocurrencies lack significant regulation while additionally remaining illegal in many countries.
2. No Chargebacks: Once a cryptocurrency payment has been sent, it cannot be reversed.
3. Crypto Price Volatility: The value of cryptocurrencies can shift dramatically. For example, on June 9, 2021, Bitcoin’s annualized 30-day volatility rose to 117.04%.
4. Match-Fixing: The relative anonymity achieved when using cryptocurrencies is beneficial in some situations, but it is also detrimental in others, such as match-fixing. Since cryptocurrencies are particularly anonymous, it is unlikely that the identity of a fraudulent crypto bettor will be uncovered when match-fixing is suspected.
5. Quantifying Stakes, Winnings, and Losses: When using crypto gambling sites, keeping track of winnings and losses is particularly challenging because the bettor’s stakes are entered in crypto terminology instead of traditional currencies. However, this challenge can be overcome through the application of powerful analytics and monitoring tools.
Additional Use Cases of Cryptocurrencies and Blockchain in Sports Betting
Blockchain, due to its peer-to-peer operational principle and high data security, brings more incredible use cases — beyond crypto-based payments — in the sports betting and gaming industry.
#1 Smart Contracts
The sports betting industry can derive extraordinary benefits from shifting to utilizing smart contracts. Unlike traditional development, which includes a margin of error, smart contracts are recorded on a blockchain, thereby making all transactions immutable. For this reason, smart contracts guarantee accuracy and fairness for both bettors and sportsbooks.
One example of a company benefitting from smart contracts in sports betting is SportsDataIO. Through its partnership with Chainlink, SportsDataIO provides real-time data for smart contracts to be used by crypto sportsbooks for secure and unwavering gambling transactions.
Scott Gimpel, CEO of SportsdataIO, explains the exceptional value for sportsbooks, “We’re confident that developers using the SportsDataIO Chainlink node will be consuming premium sports data that has been highly curated by our experienced team and secure infrastructure, leading to consistently correct outcomes for their smart contract applications.”
#2 Decentralized Gift Cards and Bonuses
The crypto sports betting landscape contains a wide range of benefits for both sportsbooks and gamblers, including highly valuable gift cards and bonuses. For sportsbooks, these incentives provide excellent marketing opportunities for gaining customers and increasing consumer loyalty. And for bettors, the benefits are obvious: they receive bonuses for using these services!
There are many excellent crypto bonuses to consider utilizing in your sportsbook. A couple that come to mind are as follows: Café Casino is offering an amazing $6,000 Bitcoin “welcome” bonus to new players on its site, while Bovada advertises a fantastic bonus of $5,000, which is split up as $4,500 for casino play and $500 for betting on sporting events.
#3 Crypto Salaries
One of the newest developments in sports is the concept of paying players in cryptocurrency. The idea may be beneficial when cryptocurrencies are on the rise, allowing players to increase their salaries as the currency’s value goes up. However, crypto salaries will prove problematic for players when the value of cryptocurrencies drops. Although crypto payments for athletes are a very new development, the Canadian Elite Basketball League is leading the way by becoming the first professional North American sports league to offer its players a portion of their salaries in Bitcoin. Another example comes from a recent announcement by Vivek Ranadive, owner of the NBA’s Sacramento Kings, stating that all members of the organization will soon be able to receive part or all of their salary in Bitcoin.
The Legalities of Crypto Sports Betting
Crypto sports betting remains relatively new, leaving some complex legal issues to resolve. The Crypto Gambling Foundation was established to ensure fairness and transparency by verifying and promoting betting operators that follow its strict ideologies for ethical practices. For sportsbook operators, the foundation’s promotional opportunities provide a powerful incentive to comply.
At this point, US-based Bitcoin betting and sports betting with other cryptocurrencies is only legal in New Jersey, Nevada, and Delaware. This limitation is regulated by the Unlawful Internet Gambling Enforcement Act (UIGEA). The 2006 legislation restricts banks and credit card companies from facilitating transactions for online gambling in states without legalized online casinos. However, due to the anonymity of cryptocurrencies, many U.S. citizens living in other states sign up for gambling accounts in countries that have legalized crypto payments. The legalities of this practice remain somewhat unclear. But the general consensus is it is acceptable provided that the websites being used are considered reputable in the gambling industry.
The flexibility, accuracy, and security of cryptocurrencies place them in a league of their own when it comes to the world of sports betting, making crypto sports betting the wave of the future. For sportsbook operators, the increased bettor trust and expanded promotional opportunities derived from cryptocurrencies substantially broaden their market potential.
Originally published at https://blog.dataart.com.