Sports Betting & Crypto: A Match Made in Heaven or Hell?
Sports betting is exploding in popularity across the US with many sites integrating crypto payments, but as the number of Americans participating increases, voices of concern are growing louder.
Sports betting has been legal in the US since just 2018, and the young industry has become a major growth sector. In the first six months of 2022, industry revenue reached $3.04 billion, compared to the $4.3 billion the sector managed in all of 2021.
In a further boost to the industry, Morgan Stanley projects that revenue will reach $8.5 billion by 2025, but as cryptoheads will know, increased revenue always comes with increased scrutiny.
The 36th state of mind
On August 1, Massachusetts became the 36th state to legalize sports betting. Across the United States, the pattern is one of relaxed regulation. Massachusetts is the third state to legalize this year, joining Maine and Kansas. California is expected to be next.
Those who benefit from the changes include advertisers and the sports leagues. During the 2020-21 season, FanDuel, DraftKings and Caesars Entertainment plowed $1 billion of sponsorship revenue into the NFL. They weren’t the only players to open their checkbooks. BetMGM, Fox Bet, PointsBet and WynnBet were among the rest.
The aggressive marketing of gambling to sports fans is already angering some. Timothy Fong, co-director of the Gambling Studies Program at the University of California worries that the industry is promoting an unrealistic dream.
“On social media, they’ll show a $10 parlay that made $180,000 and say ‘this could be you, this is life-changing money,'” Fong told Grid earlier this month. “But in reality, this isn’t going to be you.”
As Fong sees it, this type of promotion offers customers instant gratification and minimizes or ignores the dangers it poses.
It is a position that the medical community seems to largely agree with. According to information from the Mayo Clinic, gambling can lead to a variety of psychological problems, including depression and anxiety, while gambling “is a serious condition that can destroy lives. “
Crypto heaven
While the overall sports betting market is already huge, the convergence with cryptocurrency offers additional benefits and opportunities. It is not always easy to move traditional fiat currencies in and out of gambling platforms.
Crypto promises a far more efficient system. Earlier this year, superstar rapper Drake placed a $1.26 million bet on the Super Bowl with Bitcoin. As industry expert Anthony Pompliano pointed out at the time, “settlement times are faster and costs are cheaper. Bitcoin is superior from a technology format.”
It is a position shared by industry insiders. In a recent interview with TechCrunch, Greg Dean of HotStreak said, “getting your money in and out is extraordinarily painful because payouts are tied to legacy payment systems.”
It is no wonder that the industry sees enormous potential in the blockchain. Still, while crypto may offer a brave new wonderland, it may also give critics yet another stick to beat it with.
Crypto users are no strangers to slander. Darknet marketplaces like Silk Road are the grain of truth that for years have allowed critics to exaggerate the links to the international drug market. An American gambling boom could increase exposure and demand for cryptocurrency, but at the same time link it to another of society’s perceived ills.
Is the association with another societal vice something that crypto supporters want? Whether the answer is yes or no is a somewhat moot point. Thanks to decentralization, there is very little other than public agencies can do to stop convergence.
Expansion and decline
While the gambling industry is expanding in the United States, the picture elsewhere is more complex. In the UK, Europe and Australia the industry is stable or in some cases contracting.
In the UK, gambling has been legal since the 1960s, but tighter regulations have made the market more challenging in recent years, and some sectors are now in decline.
As Morgan Stanley points out, “While the US regulatory environment today is expansionary, in Australia and Europe it is contractionary, highlighting long-term risks.”
If the US follows the British model, one potential area of regulatory enforcement could be in advertising. US federal laws have previously regulated the kind of language you can use to advertise, for example, casinos. It is certainly plausible that this type of restriction could also apply to sports betting operators in the fullness of time.
For now, however, any restrictive changes appear to be highly speculative. Whether for good or ill, cryptocurrency and sports betting have a long way to go. Where that path will take them remains a matter of debate.
For Be[In]Crypto’s Latest Bitcoin (BTC) Analysis, click here.
Disclaimer
All information on our website is published in good faith and for general information purposes only. Any action the reader takes on the information contained on our website is strictly at their own risk.
