By Nick Kelland, Head of Growth at Betswap.gg
Betting on the outcome of sporting events is an ancient pastime. Humans have always been fascinated with wagers, and athletic competitions are the perfect medium for making such bets.
As technology has advanced, so have options for placing bets and what to bet on. Now, as the world faces a new digital frontier, online betting is undergoing a renaissance — one that opens up access to more people while offering users new options, fairer bets, and greater control.
Betting Has Always Been Here
A bet is simply a contract that defines a monetary return based on the outcome of a given event — be it a casino game, sports match, or even the result of a political campaign. Sporting events, in particular, have long been a major hub for gambling due to their competitive nature and uncertain conclusions. As time has passed, new types of gambling have emerged to reflect changing conditions and technological advancements. For example, Harry Ogden made history when he opened his betting business in the 1790s — becoming the United Kingdom’s first bookmaker and setting the standard for the next 200 years.
However, in the new millennium, a new type of system has emerged, known as a “Sports Trading Exchange.” Sports trading exchanges are similar to existing markets, except they allow bettors not only to bet on the winner but to act as bookmakers themselves and sell their bet, allowing them to bet on a loss.
This served as a major evolution for the field of betting, and with the rise of the mobile internet and digital gambling apps, it has become the standard for the modern online scene. Now blockchain technology and cryptocurrencies are taking things a step further.
What Blockchain Brings To The Table
Decentralized, Web3 technology, such as blockchains and smart contracts, redefine how users interact with sports trading exchanges. Now, it’s possible to use these systems to connect bettors and bookmakers through a decentralized order book. This stands to provide a user experience that is more efficient, fair, and transparent than ever before.
Unlike with most existing sports betting, where bets are placed against the house, it is now possible to create a peer-to-peer system, with users betting against other users and the exchange acting mainly as an intermediary marketplace. This means customers can decide whether to be the bettor, the bookmaker or both. It is also easier to open up the market to more than just sports wagers. This system can be expanded to betting on esports, fantasy leagues, and even social media polls.
One of the most significant advancements, however, is the concept of provably fair betting, which offers several benefits to users that were previously unavailable.
With traditional betting, users have no way of knowing if the system is truly random and fair. This lack of transparency can lead to doubts about the integrity of the system, and users may be hesitant to trust the betting platform. However, with provably fair betting, users can verify the fairness of the system using cryptographic algorithms, giving them peace of mind that the system is truly random and not manipulated.
This increased transparency also creates a more trustworthy environment for users. By verifying the system’s fairness, users can be confident that they are not being cheated and feel more comfortable placing larger bets. This, in turn, can lead to increased user engagement and a more vibrant online betting ecosystem.
Other benefits include the fact that payment systems on these platforms can be massively improved. Existing procedures can force users to wait days or jump through hoops to claim their winnings. With blockchain and smart contracts, rewards can be delivered instantly upon the resolution of the wager.
Decentralization means that such a system can be both accessible and equitable. A platform can even be designed to be interoperable with multiple blockchains, and the whole operation can be run by a decentralized autonomous organization (DAO). This means that the users on the platform can also vote to decide on future upgrades and be compensated for their participation, further incentivizing their loyalty.
The Market Is Primed
The online market was valued at $58.2 billion in 2021 and is expected to expand to $145.6 billion by 2030. Moreover, in 2018, the U.S. lifted its long-time prohibition on sports betting, opening up this industry to more consumers than ever before and leading to new revenue inflows. Combined with the massive increase in the use of smartphone betting apps, this field is seeing dramatic growth. Just consider the fact that Super Bowl 57 set records with a 25% increase in betting transactions over last year.
Various players in the industry are beginning to take note as well. Major online sports betting exchanges already exist, such as FanDuel and BetUS. However, the world of Web3 betting is only beginning to warm up. There are multiple broad-purpose exchanges, including Aver and Dexsport, which offer various forms of betting, including sports.
Ultimately, the benefits of transparent, safe, decentralized systems are too great to ignore. When combined with the unmistakable upside in the industry and growing interest, it’s clear that these platforms are primed to redefine the field as a whole.
About The Author
By Nick Kelland, Head of Growth at Betswap.gg, one of the biggest decentralized sports betting exchanges in the world. Previously, Nick was a Head of Marketing at Partnerships at leading Web3 game developer Immutable X.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.