Will Bitcoin Betting Overtake Traditional Sportsbooks?

Will Bitcoin Betting Overtake Traditional Sportsbooks? Will Bitcoin Betting Overtake Traditional Sportsbooks?

The sports betting industry takes in a mind-boggling amount of money. Estimates put the industry at a $10 billion value in the United States alone and a global haul of nearly $240 billion. But that amount of money is only a fraction of what the industry could take in over the coming years as governments worldwide continue to expand the role of sports gambling and the industry embraces new technologies and efficiencies to expand the reach of online sports gambling worldwide.

Most of us have seen the commercials that now run on virtually every broadcast, including sports broadcasts, advertising new ways to bet online. This explosion in online sports betting occurred thanks to the United States and other world governments legalizing a practice that had previously been heavily regulated and restricted. But while it’s easier than ever to find a place to bet, it isn’t always as simple or secure as many would like to place those bets.

That’s where Bitcoin betting comes into play. With the rise of blockchain technology and the privacy revolution decentralized coins have created, cryptocurrencies are shaking up the sports betting industry. Some have even argued that Bitcoin betting will outpace traditional sportsbooks in the coming years. 

How realistic is that scenario? In this article, we’ll take a look at the world of Bitcoin betting and examine a few of the reasons that it may soon be bigger than traditional sportsbooks. 

Crypto’s Killer App

While crypto has grown exponentially as an industry over the last ten years, it still hasn’t broken through to the mainstream the way other technological innovations have. Because of a series of high-profile failures, from the crash of the NFT bubble to the collapse of FTX to the wild fluctuations in value of crypto assets, digital currencies still have a bit of an unsavory reputation among everyday consumers. In a survey in 2024, 63% of Americans said that they had little or no confidence that crypto was a safe way to invest or trade, according to Pew Research. Only 17% of American adults have ever used crypto, and the vast majority of those users were young men.

That leaves crypto with a major challenge in terms of trying to go mainstream. In short, crypto needs a killer app to help popularize it and make it acceptable to mainstream consumers. Many believe that sports betting could be that killer app that will help normalize crypto to the general public. 

Crypto’s traditional markets, including NFTs, tokenized real estate, and the metaverse are simply not large enough to attract the millions, or even billions, of users crypto needs to become a universal currency. Sports betting, by contrast, is vastly more popular than NFTs and offers a chance to prove to everyday users that crypto isn’t just safe but is also a better way to do business. In the U.S., 46% of all adults have placed a sports bet at some point.

Crypto-fueled sports betting will make the industry faster and more efficient and can help convince regular people that crypto is a safe, effective, and efficient way to trade.

What Makes Crypto Work?

Cryptocurrencies like Bitcoin operate on the blockchain, which is an innovative way to decentralize transactions and make them more secure. On the blockchain, the ownership of an asset is recorded and made public so that it can be immediately verified, but these records are stored in a way that makes them virtually invulnerable to tampering. Therefore, any transaction has a clear, safe, and secure record that is instantly verifiable. The actual operations of the blockchain are a bit more complicated, but the general idea is that using the blockchain makes transactions safer and more secure. 

They are also faster because the blockchain cuts out the middleman—the banks. A typical financial transaction is run through the banking system, and that means that there is significant friction involved. During any such transaction, the banks not only take a cut of the money as transaction fees but also delay the movement of money for a fixed period, during which the banks are able to collect interest on that money. Crypto cuts out these delays and fees by connecting both sides of a transaction directly together without the need for a middleman. As a result, most transactions are nearly instantaneous.

Technically, this is called “disintermediating the market for fiat and savings technology,” but we don’t need to get too deep into the terminology of the crypto field.

Cutting Out the Middle

Sports betting is currently an industry that is heavy on middlemen. Currently, when you place a bet on a sporting event, the bookmaker takes a cut of the action, usually 10%. So, if you win or lose, 10% goes to the bookmaker. Across the gambling industry, sports betting is the fastest growing component—increasing 75% year over year. And beyond the legal gambling outlets, illegal betting accounts for another $500 billion worldwide, with higher fees and greater risk of fraud. That means that bookmakers’ fees are growing, too. But what if they didn’t have to? That’s the promise of the blockchain. By removing extra steps, best Bitcoin casinos and decentralized betting sites let users place bets with lower costs, more transparency, and better security.

Currently, 70% of all wagers are placed online, and if the majority of those could be moved to the blockchain, we could cut out millions in fees and return that money to the people making the bets, increasing their betting power. Currently, there are efforts underway to create a decentralized bookmaking exchange to record wagers and payouts in order to replace bookmakers with an automated, decentralized, and less expensive alternative to bookmakers. 

Imagine how increasing speed can also help the gaming industry. Consider, for example, what happens when a gambler reads the latest sports news and then acts on it. Currently, it takes time to process that news, make a bet, and have that transaction go through—all while everyone else is reading and reacting to the same news. By cutting out the middle, transactions will move faster, letting better react to breaking news in almost real time. 

Crypto Improves the Betting Experience

There are many ways that crypto can make sports betting better. First, by maximizing capital efficiency, bettors can make more bets with less money, all while limiting the risk of fraud. Projects can also make use of tokens to encourage participation and the recruitment of new players. For example, a platform might offer tokens to players who bet on the platform or provide liquidity. This reward for helping the platform grow encourages more investment in the platform, which in turn makes it bigger and attracts more users. As more users patronize the platform, the amount of money in the system grows, allowing for bigger payouts. Platforms can use the money they make from the fees paid by users to distribute them to those who have staked the token, creating an upward spiral of investment and reward.

Additionally, crypto can allow users to trade on live odds, increasing the excitement of betting by allowing users to capitalize on the trend of a game while it is in progress, not simply betting on a binary win-or-lose outcome.

The bottom line is that crypto can make sports betting easier, faster, safer, and more fun. As more everyday bettors discover the possibilities of crypto, sports betting will help to make Bitcoin and other cryptocurrencies into a regular part of daily life.

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