How Blockchain Can Provide a Crucial Solution to the Sports Betting Transparency Problem
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With sports stadiums closed across the globe and tournaments put on indefinite hiatus, the pandemic put the competitive sports industry on hold. However, in 2020, the online sports betting industry thrived.
According to Legal Sports Reports, the industry increased by 39% year over year, rising from USD 13 billion in 2019 to USD 18 billion in 2020. The burgeoning sector is set to only continue to accelerate, with Ark Invest predicting that it will increase from USD 18 billion to USD 180 billion from 2020 until 2025 and Acumen Research and Accounting predicting that the global sports betting market will have a CAGR of 10% from 2021 to 2028.
The Problem in the Betting World
Despite the fact that the industry is experiencing rapid growth, an alarming amount of illegal sports betting is still being reported; a recent report by the United Nations Office on Drugs and Crime (UNODC) confirmed that the issue continues to bring organized crime connected to match-fixing. Written by 200 experts from governments, sports organizations, and private-sector firms, the review was part of a larger report on sports corruption and aims to find solutions for governments so they can combat illegal sports betting and money laundering.
Executive Director UN Office on Drugs and Crime, Ghada Waly, states, “Corruption strips sport of its positive, transformative power. There is widespread recognition of the negative economic and societal consequences of corruption in sport and in particular its impact on youth. To effectively address this problem, more work is required to understand the scale, scope and manifestations of corruption in sports worldwide”.
In the findings, estimates of approximately USD 340 billion to USD 1.7 trillion were traced annually to illicit betting markets, while the legal sports betting market in 2020 was approximately USD 40 billion.
“Illegal betting is a major driver of corruption in sport and has a direct relationship with the manipulation of sports competitions,” the study said. “Illegal betting takes place in both grey and black markets and the licencing framework for grey-market operators is often opaque, especially in the context of online betting platforms and jurisdictions offering bets on events taking place in other jurisdictions.”
Regulations continue to evolve in the sports betting landscape, with the US passing state-level legalization in 2018 at the Supreme Court and lawmakers in Canada also recently passing single-game wagering at a provincial level. Efforts to regulate the industry arrived as large amounts of money were found to be wagered with illegal sportsbooks; in Canada, USD 10 billion was found to be wagered per year illegally.
The betting industry has long been dominated by sports betting giants and its constantly-evolving regulatory requirements provide many barriers for newcomers, however, thanks to the rise in blockchain technology, transparency in sports betting is now a possibility. The application of blockchain technology to the world of sports betting allows a new landscape where organizations can be self-regulated, transparent, and independent of larger betting organizations.
How Blockchain Offers Transparency
One of the frontrunners in this space is the new blockchain protocol Betswap.gg. The first-ever decentralized betting exchange is built on the Ethereum Network and Polygon Blockchain with claims to offer the world’s first decentralized and anonymous alternative to the monopoly of betting exchanges. The technology allows bettors, no matter where they are in the world, to connect to their MetaMask crypto wallet instantly, where they can then bet on any sports, all with the same benefits they would receive through a typical betting behemoth.
Betswap uses blockchain technology to guarantee that bets and payouts are safe and secure. Most importantly though, it provides transparency in an industry that is known for obscuring its ledgers and transactions.
By merging blockchain with all types of betting, Betswap aims to connect investors and bettors and provide a space where fraud is no longer a possibility thanks to its transparency and protection through the power of blockchain technology. It also allows for an accessible betting exchange that enables users to freely choose between backing or being a bettor as well as laying or being a bookmaker for a trustless sporting event outcome.
Sports betting is a flourishing industry, yet is still facing corruption. As governments grapple to find solutions for ongoing illicit betting, blockchain technology provides a decentralized and anonymous solution. By diverting the power from the betting monopolies and placing freedom in the hands of sports bettors, technology like Betswap can provide a welcome solution to the industry’s lack of transparency.