News > FinTech

How Bitcoin is shaking up the gambling world

By NexChange
FinTech

Betting with Bitcoin is not new. The anonymity it offers has seen it be adopted for various illicit purposes since its inception and gambling is no exception. But now Bitcoin - and the nascent digital gaming industry it supports - wants to go mainstream.

Gaming platform Augur is one of the ways in which this is happening. Augur allows participants to wager money on any future event they want - including sports events.

The software sets the odds, collects the bets, and disperses the winnings. All the money in the system is Bitcoin, or other types of cryptocurrency, no credit cards or banks are involved.

While peer-to-peer betting already exists on platforms like Betfair, Augur's use of blockchain technology means there is no middleman and no way to switch it off. It is drifting into uncharted waters and some are worried about its implication for governments and business.

In the Racing Post, Tom Kerr looks at the implications of this for horse racing, but it easily applies to other sports. Firstly, the combination of an anonymous betting exchange and anonymous cryptocurrency will make it hard to keep the sport fair, he says, as racing relies on bookies flagging up suspicious bets.

Also the platforms like Auger threaten to massively disrupt existing bookies by having no middlemen, no overround and no commission beyond 1%. It is very early days for the space Kerr adds, but the technology is now there and the  trend is going nowhere:
At some point, unregulated and uncontrollable betting platforms like Augur may become commonplace. If that happens it will make the disruption betting exchanges caused to gambling and racing seem like nothing.
Photo: John Athayade

Subscribe to our Newsletter

Be one of the first to experience the future of financial services