Bitcoin Betting: How Crypto Will Soon Outpace Traditional Sportsbooks

Many believe that sports betting could be the killer app that will help normalize crypto to the general public.

The sports betting industry is a behemoth, generating a staggering $10 billion in the United States alone, according to recent estimates. Globally, the industry rakes in an astronomical $240 billion. But this gargantuan sum is poised to multiply exponentially in the coming years as governments worldwide continue to expand the role of sports gambling and the industry embraces new technologies and efficiencies to broaden the reach of online sports betting worldwide.

Most of us have encountered the ubiquitous commercials that now air on virtually every broadcast, including sports channels, relentlessly promoting new platforms for online betting. This surge in online sports betting can be largely attributed to the legalization of a practice that was once heavily regulated and restricted by the United States and other world governments. However, while finding a place to bet has become easier than ever, placing those bets is not always as straightforward or secure as many would prefer.

This is where Bitcoin betting enters the arena. With the rise of blockchain technology and the privacy revolution decentralized coins have created, cryptocurrencies are poised to disrupt the sports betting industry. Some have even boldly asserted that Bitcoin betting will eclipse traditional sportsbooks in the coming years.

How realistic is such a scenario? In this article, we’ll delve into the world of Bitcoin betting and explore a few reasons why it may soon outpace traditional sportsbooks.

Crypto’s Killer App

Despite crypto's exponential growth as an industry over the last ten years, it still hasn’t broken through to the mainstream in the same way as other technological innovations. A series of high-profile setbacks, ranging from the NFT bubble burst to the collapse of FTX and the wild fluctuations in the value of crypto assets, have left digital currencies with a somewhat unsavory reputation among everyday consumers. According to a 2024 survey by Pew Research, 63% of Americans stated that they had little or no confidence in crypto as a safe way to invest or trade. Only 17% of American adults have ever used crypto, and the vast majority of those users were young men.

This presents a major challenge for crypto in its quest to go mainstream. In essence, crypto needs a "killer app" to help popularize it and make it palatable to mainstream consumers. Many believe that sports betting could be that killer app, helping to normalize crypto among the general public.

Crypto's traditional markets, such as NFTs, tokenized real estate, and the metaverse, are simply not large enough to attract the millions, or even billions, of users crypto needs to become a universal currency. Sports betting, on the other hand, is vastly more popular than NFTs and offers an opportunity to demonstrate to everyday users that crypto is not only safe but also a superior way of doing business. In the U.S., 46% of all adults have placed a sports bet at some point.

Crypto-fueled sports betting will make the industry faster and more efficient and can help convince regular people that crypto is a safe, effective, and efficient way to trade.

What Makes Crypto Work?

Cryptocurrencies like Bitcoin operate on the blockchain, which is an innovative way to decentralize transactions and make them more secure. On the blockchain, the ownership of an asset is recorded and made public so that it can be immediately verified, but these records are stored in a way that makes them nearly impossible to tamper with. As a result, any transaction has a clear, safe, and secure record that is instantly verifiable. The actual workings of the blockchain are a bit more involved, but the general concept is that using the blockchain makes transactions safer and more secure.

They are also faster because the blockchain cuts out the middleman—the banks. A typical financial transaction is routed through the banking system, and this entails significant friction. During any such transaction, the banks not only take a cut of the money as transaction fees but also delay the movement of money for a fixed period, during which the banks are able to collect interest on that money. Crypto circumvents these delays and fees by directly connecting both parties to a transaction without the need for a middleman. As a consequence, most transactions are nearly instantaneous.

Technically, this is referred to as “disintermediating the market for fiat and savings technology,” but there’s no need to delve too deeply into the terminology of the crypto domain.

Cutting Out the Middle

Sports betting is currently an industry that is heavily reliant on middlemen. When you place a bet on a sporting event, the bookmaker typically takes a cut of the action, usually around 10%. So, whether you win or lose, 10% goes to the bookmaker. Across the gambling industry, sports betting is the fastest growing component—increasing 75% year over year. And beyond the legal gambling outlets, illegal betting accounts for another $500 billion worldwide, with higher fees and greater risk of fraud. That means that bookmakers’ fees are also growing. But what if they didn’t have to? That’s the promise of the blockchain. By