Blockchain Might Just Be Heaven-Sent for Betting
In the months following the United States Supreme Court’s reversal of the ban on internet sports betting,
Nevada found itself with some sudden company as seven other states moved to legalize the activity. Specifically, Delaware, New Jersey, Mississippi, West Virginia, New Mexico, Pennsylvania, and Rhode Island were quick to act on the Supreme Court’s ruling. And at this point, there are even more states getting things started, though in most cases it’s expected that the legislative process could drag, perhaps for a year or more.
New Jersey, in particular, has made significant strides, and has ultimately demonstrated the full potential of the betting industry outside of Las Vegas (and greater Nevada). Residents of the Garden State now have access to New Jersey-based sportsbook sites, with some of the biggest names in the business having quickly integrated into the statewide industry. Already there’s positive talks about the revenue this is bringing in for the state, and locals and tourists alike are enjoying the new opportunity to legally bet on sporting events and other goings on.
As quickly as a U.S. betting industry seems to be emerging, though, it’s also doing so at a very interesting time for betting more broadly. It’s only in the last few years that sports betting has been streamlined to some extent, with websites modernizing significantly, more security and regulation being put in place, and app-based betting becoming more popular. The way for advancement is being paved, and many are already looking at a number of new technologies that could continue to improve the modern betting business.
One such technology is blockchain. A year ago, just days after that landmark Murphy vs. NCAA court decision, Market Mad House listed the cryptocurrencies that would likely benefit from the legalization of online betting.
Ethereum was identified as the likely big winner, mainly due to the Ethereum blockchain being the industry standard. That means most projects designed to cash in on legalized sports betting will be using this same blockchain platform. What wasn’t explained in depth, though, is how blockchain can lead sports betting to even greater heights.
Perfection In Execution
As Tech Talks correctly pointed out in a piece on this very issue, “the pressure to maintain perfection in execution is massive” when enormous amounts of money are at stake.
Take, for example, the $82,000 payout (on a $110 bet) that a New Jersey bettor nearly didn’t get because the sportsbook company claimed that its “automated system mistakenly generated odds.” The bettor got the money in the end, but only after said company suffered a great deal of negative publicity. That and similar scenarios (altered input data, delayed deposits or withdrawals, and voided payouts) can be prevented by blockchain.
Blockchain paves the way for smart or self-executing contracts, which are converted to computer code, then stored on the system and replicated across an entire network of computers. A bet placed on blockchain can be worked into this sort of contract such that it is executed automatically and immediately. This sort of bet cannot be altered, denied, or lost. So, a $100 bet with a payout of $100,000 is exactly that: a $100 bet with a payout of $100,000.
Crypto Payouts
Cryptocurrency adoption hasn’t gone fully mainstream yet, but it can be helped on its way by the growing betting industry.
By some estimates, this industry is worth more than $50 billion, and could be well over $100 billion at some point in the near future. Naturally this makes for a huge opportunity for digital currencies, which in some cases are already giving bettors a more efficient and transparent deposit and payout system.
Currently, cryptos are still viewed as alternative payment methods, and are only available at a minority of betting platforms. However, with the ease and convenience they provide, as well as the potentially expanding use of blockchain in this industry, it is highly likely that bitcoin, Ethereum, and the like will eventually gain more popularity with bettors, both in the U.S. and around the world.
Blockchain’s benefits make it appealing to a host of industries. It is therefore not a surprise that online betting is beginning to leverage these advantages. What remains to be seen is just how far this all can go.