The internet changed the way we do… everything.
Blockchain is going to be as revolutionary as the internet. But what industries will come first?
Some think it will be financial services.
Others think it will be digital cats.
At SportX, we think it’ll be sports betting.
Why does sports betting suck today?
Sports betting is systematically rigged against users. There’s a lot of sports betting sites out there, but they all fall into one of two categories. Currently, the majority of online sports bettors use platforms called sportsbooks.
Sportsbooks, like Bet365, are the definition of “the house”. Specifically, they set the odds and take the opposite side of every bet with their users. This means that every dollar that bettors win, is a dollar that the sportsbook loses. You’ll notice that this results in a significant conflict of interest between sportsbooks and their users…
Their entire business model relies on making sure their users consistently lose money, something we call The Bet365 Problem:
Imagine you’re the CEO of Bet365.
Your goal is to maximize profits for Bet365.
Being the intelligent CEO you are, the only reasonable thing to do would be to place some measures in place that are going to make it really hard for your users to make money.
You’ll probably do a couple things like this:
Hide High Fees in Shitty Odds
You’ll sneak some high fees into the odds just to make sure that even if your users do win, they’re not taking home too much money.
You’ll probably set the fees to about 5-10% because that means that a bettor guessing the result of a coin toss needs to be right 55-60% of the time just to break even.
As long as you don’t get any psychics betting on your platform, you’ve probably done a good job here.
You’ve set the fees high… but you feel like it’s not enough. The board of directors wants to improve profit by 10% this year.
You decide that the next thing you should do is to abolish all forms of transparency. No information on how odds are set, how maximum bet sizes are calculated, and how other bettors are betting.
The only thing bettors get to see are the odds that you set. That’s it.
Imagine if the New York Stock Exchange hid current stock prices, past trades, and daily trading volumes. That’s the level of transparency in sports betting today.
You’ve done a pretty good job at this point. Users have no material information to drive their decision making, and even if they win – the high fees ensure your company isn’t losing too much money.
But…. You need one last measure in place. Just in case any talented, skillful sports bettors sneak by. Sort of like an emergency plan.
What do you come up with? Bans for winning bettors. Brilliant!
Everytime you find a bettor who’s consistently winning money on your platform, you hand them a lifetime ban. Problem solved.
The Future: Decentralized Sports Betting Exchanges
The conflict of interest caused by the Bet365 problem is the cause ofd all the user-harming measures put in place to protect sportsbook corporate profits.
Here’s the interesting part.
The Bet365 problem doesn’t exist for decentralized sports betting exchanges.
Instead of acting as the “house” and taking the opposite side of every bet, betting exchanges act like stock exchanges. They match buyers with sellers and take a commission on every trade.
What’s important is that they do not profit from bettors losing money.
Betting exchanges allow users to bet peer-to-peer instead of against the house.
With no Bet365 problem driving decision making about fees, transparency, and bans – betting exchanges tend to act a little differently than sportsbooks:
Higher Profit for Users
Betting exchanges typically charge fees of 2%, only on winnings. That means if you lose your bet, you don’t pay any fees.
This results in higher profit for smart sports bettors.
Better Odds & More Transparency
Betting exchanges do not set the odds on an exchange. Instead traders submit orders (bookmakers) and other traders accept orders (bettors).
Bookmakers are competing to get their orders accepted. They attempt to outbid each other by offering the best odds available. This results in an efficient market with higher odds than sportsbooks, and greater profit opportunity for traders.
Additionally, betting exchanges operate with 100% transparency.
Bettors are able to view all orders available on the market. This means they can see important information such as how other bettors are betting, what the maximum bet size is, and how the odds change over time.
Betting exchanges never ban winning traders from using their platform. Betting exchanges match traders against each other and take a small fee, similar to how Uber matches riders with drivers.
Therefore betting exchanges are incentivized to maximize trading volume by improving the user experience. Exchanges do not care whether traders win or lose.
If a smart sports bettor won $1 million every day, they’d be welcome at a betting exchange.
The Future 2.0: Crypto Sports Betting Exchanges
Crypto allows sports betting exchanges like SportX to tap into a global liquidity pool who bet peer-to-peer in a single, stable currency. This gives users better odds and transparency.
Do I have to bet with Bitcoin?
No. Cryptocurrencies like Bitcoin are incredibly volatile. Nobody wants to bet in a volatile currency since your winning payout could change by 10% or more.
That’s why all bets on SportX are placed in Dai, a stablecoin pegged to the US dollar. 1 DAI = 1 USD, so you don’t have to worry about volatile currency fluctuations.
Enough explaining. Its time to get our hands dirty and learn how to use SportX.
Keep Reading: How Does SportX Work? Crypto Sports Betting Explained