Blockchain in Sports Betting: Pros & Cons

The industry of sports betting is working pretty well, like always. Various bookmakers help bettors on an everyday basis with no issues. However, there is always space for development within any industry, and things are no different for sports betting.

When it comes to sports betting, people think that the technology of Blockchain remains the answer to ultimate development. Being associated with Bitcoin and different cryptocurrencies, it can further be utilized for sports betting and beyond. With that being stated, check out to know more about Blockchain and the sports betting industry.

The technology of Blockchain in brief

Blockchain, being a relatively new concept to an average person, initially arose as a process for record-keeping Bitcoin. Since its start, it has discovered more applications within companies and cryptocurrencies. However, what is Blockchain precisely

The above description highlights very less when it comes to an average person. Fortunately, you can know more about the basic meaning by taking a glance below.

If you are looking forward to the actual definition, you may come across something like “A decentralized and distributed public ledger” The data contained in every block comprises three parts. This includes the date, time of purchase and monetary amount. A significant advantage of Blockchain is that it does not store your name within these blocks. The term blockchain comes from the truth that this technology is encircled with a chain of blocks. Those are recognized as digital information, while the entire chain can be considered as a public database. Therefore, a reliable sportsbook does not need your data to accept pay wins and wagers. Blockchain records each of this information with the help of a digital and anonymous signature, known as a hash.

Blockchain in sports betting: Pros

The decentralized ledger technology is not something that sportsbooks are deeming to grab the headlines. Rather, it comes with real advantages to both you and bookmakers. Below are some of the key benefits that this technology of Blockchain brings to the table.

Enhanced trust

Everything that we have covered so far may seem to favour gamblers. But, sportsbooks additionally profit from the blockchain technology through an enhanced trust tractor. Anyone might feel that any bookmaker could rip them off. But, the same cannot be stated when it comes to a sportsbook that puts their operation on the technology of Blockchain. They entirely understand that by utilizing this technology, they cannot treat bettors unfairly or cheat them. Similarly, one can feel more convenient utilizing blockchain-based sportsbooks.

Facilitates fair betting

Being a gambler, you can initially profit from the transparency of Blockchain. You do not need to put complete faith in the bookmaker or depend on the media uproar. Blockchain makes sure that fair bets take place throughout the board. In case you feel that there is a dispute, feel free to review your wager with the help of Blockchain to make sure that everything happens fairly. You cannot expect identical transparency from the conventional bookmaking industry. Moreover, the average sportsbook works out its operations with the help of private databases.

Enhanced security

Blockchain enhances security at sportsbooks with the help of multiple processes. Initially, each new block happens to be stored chronologically at the end of every Blockchain. Once a block is added, the contents of the block are approximately impossible to tamper without a huge concentrated effort. The hash code that discovers every block possesses a string of numbers and letters. If this data is altered, then the hash is also likely to be changed. Check out this example to understand how this feature enhances security at sportsbooks:

• You have placed a bet.
• A Sportsbook online offers incorrect odds that profit you.
• They try to edit the wrong odds.
• The hash of the block changes.
• The next block within the chain features the previous hash.
• The bookmaker also needs to update the block to pull off their scam.
• The new block’s hash alters as well.
• Now they are caught within an endless loop of changing each block to cover themselves.

Ultimately, the sportsbook needs to devote more money and time to scamming you then it is worth it. Certainly, this concept of sportsbook attempting to change odds later is severe and may never happen in the first place. However, when Blockchain is involved, this idea does not even have to cross your mind.

Prevent possible mistakes at the bookmaker’s end

Not all that goes wrong in the sports betting sector is a result of the infamous bookmaker’s decision. Rather, errors are also made by technology and employees. On average, the sportsbook deals with hundreds of wagers daily. In most cases, they perform a reliable job of managing these bets and ensure that their work runs without hiccups. But, in the case of various incidents, mistakes can still happen. Luckily, some bookmakers manage these errors better sometimes. Preferably, these issues can be restricted before they have a possibility of happening. Blockchain technology can help restrict such errors by utilizing a broad network of machines to legitimate bets, other than a lone private database.

Further banking options 

Blockchain technology is most closely linked to cryptocurrencies. Sportsbooks that utilize the technology additionally accept crypto deposits. Cryptocurrencies come with particular advantages over conventional payment alternatives. The primary one is decentralization. Governments or banks do not manage Ethereum, Bitcoin, Litecoin, Bitcoin Cash and various other cryptocurrencies. Rather, they enable peer-to-peer transactions between sportsbooks and you. An e-wallet or Bank cannot cancel your betting deposit. On the other hand, miners authenticate your deposit, and they cannot scrutinize the type of your transaction.

Blockchain in sports betting: Cons

So far, we have discussed the unique ways that blockchain technology can assist the betting industry. But this technology also comes with some drawbacks. Check some of the main concerns below.

Cost of implementing new technology

Transitioning from one technology to another is not affordable. Other than the time and commitments, it originally came with financial responsibility as well. Primarily, sportsbooks are required to cover the workforce to make such a transition possible. They might need to retain employees in particular areas to utilize Blockchain properly. You might witness your prices as the sports bettor goes up, too.

The most important thing is the fees associated with crypto deposits. But this price might skyrocket throughout the times of high network usage. Other then conventional banking options, you’ll ever understand how much you need to pay for the cryptocurrency deposit from one time to the next.

Learning curve

Both sportsbooks require you to spend time understanding the new technology. Later on, you might discover the betting process to be pretty seamless. But, you will need to understand how to deposit with cryptocurrencies.

Assuming that you are looking forward to verifying bets on the Blockchain, you will additionally require to spend some time learning the technology as well. Bookmakers who want to operate through Blockchain must also put effort into implementing the solution. Sportsbooks will be required to spend additional time moving their work from a private database to Blockchain.

Lesser jobs within the betting industry

Both land-based and online sportsbooks employ a lot of people. But, blockchain technology comes with the potential to replace many of these jobs. People involved with work related to sportsbooks databases or verifying bets might be out of work. Certainly, the advantage is that it could additionally lower the working costs for sportsbooks.

Many bookmakers would further push the savings onto consumers in any other form. However, a portion of people who depend on sports gambling for employment would result in losing all their jobs.

Shady sports betting projects

Blockchain might go a long way when it comes to promoting trust and reliability. However, organizations that utilize technology are not always so trustworthy and loyal. Some of the batting-related ICOs that came up in 2018 have previously been labeled scams.

Those projects are accused of raising money from outside investors and putting no effort into their sites. This fraud has affected many areas of crypto other than only sports gambling. But, they have provided things related to Blockchain in a bad name in some eyes.

Significance of Blockchain in sports betting

A block happens to be added to a sportsbook’s Blockchain when it starts storing new information. However, before this occurs, they need to be four occurrences, such as

Transaction:

You need to make a wager at any online sportsbook.

Verification of transaction:

A network of computers authenticates that your bet happened.

Storage of transaction:

Your bet gets stored within a block, along with the digital signature and amount.

Block gets a hash:

The block concerning your wager is provided with a unique hash to separate it from others.

How Blockchain Works?

The block turns out to be publicly accessible once it is added to the Blockchain. With that being stated, anyone else or you cannot authenticate the legitimacy of your bet. Furthermore, the fact that others and you can legitimate wagers keeps bookmakers loyal. They cannot cancel wagers or claim that you did not win without exposing themselves. With the conventional bookmaking business l, sportsbooks possess private databases that collect data. In case of an incident, these private databases can be hidden behind.

For instance, consider a controversy in September 2018 that involves an NFL game between the Oakland Raiders and Denver Broncos. In that case, a man from New Jersey placed $110 in-game wager late during the contest. The Broncos happened to be trailing the raiders 19-17 late within the fourth quarter. Here, the Gambler wagered that Denver might come back and win the game. Post his bet placing; the odds instantly jump to 750 to 1 in his favour.

This mistake was a result of a machine glitch and not the bookmaker’s choice. When Denver kicker Brandon McManus went towards a game-winning field goal, the man won his bet. However, FanDuel refused to pay for the glitch. Such a decision might have had numerous media outlets not jumped on the story.

Final verdict

That said, Blockchain is not a magical solution to the ideal sports betting business. But, it comes with some advantages that can assist the betting world to get through.

For amateurs, Blockchain comes with the trustless environment where one can place bets without bothering. Moreover, sportsbooks cannot accuse you over without any consequences as everything is accessible on a public chain. Media outlets are no more dependable on picking up your story to save you from defeat. Rather, you can point to the public information as proof. Also, you can look forward to furthering overall security. A solid blockchain network backs up everyone from crooked sportsbooks and hackers.

The latter is not a rampant issue within the industry. But, you do not have to bother regarding it at all with Blockchain as of the converted method of trying to alter hashes. Another benefit of blockchain technology is extensive deposit methods. If you are from the United States of America, for example, you will experience an easier time depositing at offshore sportsbooks due to decentralized cryptocurrencies. On the other hand, the sportsbooks also profit from blockchain technology. But, everything is not as rosy as it appears with Blockchain.

Both the sportsbook and you require to deal with the learning curve when utilizing anything related to this technology. Sportsbooks require to rethink about prices of applying Blockchain. They require both the time to transition everything as well as the workforce. Bookmakers also might have to fight off a faulty reputation after they do switch over as businesses related to Blockchain have received a bad name from ICO scams.

In Conclusion

Transition requires a lot of work. Experienced bookmakers who always conducted private databases might stick to their processes. However, it will be interesting to notice if the sportsbook profits lead to a widespread transition towards technology anyway. If the sportsbooks begin witnessing their competitors gain at the huge edge, they will also be looking forward to switching over.