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After Supreme Court decision, Bettium bets gamblers will take to blockchain

Sports betting is a trillion dollar business worldwide and one blockchain-based company is trying to take a slice of it

Crypto gambling

Crypto investors know something about cashing in tokens (via Shutterstock)

You shouldn’t gamble, but if you do, you shouldn’t gamble with a person who can break your legs.

That’s the closest thing to gambling advice that Modern Consensus feels comfortable giving. And so much of blockchain technology right now is either speculation or gambling.

“When you don’t know what you’re doing, it’s gambling. When you do know, it’s trading,” goes the old traders bad joke. And gambling can be, well, a gamble when you’re up against unsavory characters, or even a friend who wants to back off of a friendly bet.

Enter Bettium, the blockchain-based system to help users trade bets with one another.

Unlike the traditional bookmaker-style of online betting, Bettium is a global decentralized platform enabling users to bet on sporting events against each other. Do you and a friend come from rival schools? Are you in a strange town where you know nothing about the local team, but you care to make the game a little more interesting? That sort of thing.

According to an Oxford Economic report commissioned by the American Gaming Association, “Sports betting is expected to contribute $22.4 billion to US GDP” in 2018. Sport betting in the US has traditionally only been legal in Nevada. But buried deep in that report is an open secret that any sports fan knows: lots of people have no problem gambling illegally.

Blockchain companies always promise to disrupt a billion dollar industry, but Bettium is going squarely after the entire gambling ecosystem. That includes the casino-style bookmakers, the neighborhood bookie, and your friendly office March Madness bracket.

In 2015, EY conducted an online consumer survey and found that 28 percent of U.S. adults bet on sports. And they all don’t live in Nevada. They wager an average of $1,554 per year. EY applied these values to the total U.S. adult population and estimated an annual $107 billion in off the books sports betting. “Additionally,” according to the Oxford Economics report, “EY noted survey respondents indicated that they would significantly increase their sports betting activity if sports betting was more widely legalized.”

The AGA estimates that all U.S. sports betting combined would equal $150 billion. To put it in perspective, that’s 14 times more than Americans spend going to the movies or twice as much as they put into grooming and feeding their pets. There are four or five viable gambling startups and ICOs in the works. But unlike every other vertical in crypto, gamblers are already used to betting with tokens and coins and have no problem cashing in their chips at one casino and buying into another.

Bettium hopes to use big data and established experts to improve forecasts and strategy. The plan is to give both wagerers in a bet equal and direct access to A.I., Big Data and powerful analytical tools to help the bettor make smart conclusions and smart bets, all on a peer-to-peer basis.

Some of this sounds far-fetched, but more of it sounds too good to be true. So Modern Consensus spoke to Bettium CEO Nathan Hunt.

 

Modern Consensus: You’re calling me from Moscow about your Estonia-based company. But by your own estimate, 20 percent of the $3 trillion spent on sports betting every year comes from Asia. And only 12 percent from the U.S. Is it fair to say that until a couple weeks ago we wouldn’t be having this conversation?

Nathan Hunt

Nathan Hunt, CEO of Bettium.

Nathan Hunt: “Three weeks ago, I would say we’re not in the U.S. market. Anybody who wants to make a bet has to go to Vegas. Today, the answer to that question would be different. On May 14, 2018 the Supreme Court came out with a decision that it’s unconstitutional. Congress has no such authority. Gambling is now considered to be the purview of the states. This is a tremendous revenue stream that in the past all went to the great state of Nevada. It’s really changed our marketing view, suddenly.”

MC: Why should we go with Bettium instead of making the trip to Vegas?

NH: “We’re a peer-to-peer network. That’s the main difference between our site and the several hundred other betting and gambling site are out there. That means that we are not a bookmaker. We are not betting against the player. When you walk in, you are not betting against the house. If you lose, you will lose your entire bet, your stake. Bookmakers can’t predict with 100 percent accuracy, so they have to charge a hefty commission. Seven to 10 percent. It’s a mathematical business. They are financially interested. The bookmakers keep track of people who win their bets. They have KYC [Know Your Customer] procedures online. They will kick you out of there if you’re winning, just like Vegas if they can see you’re counting cards.”

MC: So you’re handling bets where you actually want people to win. Even if they run significant statistical analysis. Even if they’re just super lucky.

NH: “We will not only be welcoming people with big data, we will be providing the data. We will provide data on bets, how teams perform when certain players are absent. And that data will be at the fingertips of the bettor.”

MC: Explain peer to peer betting in the absence of “betting against the house”?

NH: “When you have a major betting event, there will be people betting on both sides. Our angle is to match those people, a platform where the whole world can find somebody to bet against. The oddsmakers in Vegas will give you a greater payout if you bet on the underdog. With our system, it will be based on the players. You want 3-to-1 odds? We’ll find you a partner. We’re basically freeing up the betting world from the significant restraints. We’re going to allow the players to be in control and from the point of view of knowledge.”

Sports betting

Top 5 sports by betting revenue (graphic by Bettium)

MC: Let’s place a bet.

NH: “Betting introduces a whole new aspect to sports. It makes sports interesting on an entirely different level, regardless of which teams you follow. Even people who don’t follow basketball will be happy because they have $10 on one team.”

MC: March madness winner?

NH: “We’ll have brackets, we’ll have fantasy sports. In Asia, they have entirely different leagues. E-sports is huge. The money put into prize funds and bet on these e-sporting events is tremendous. E-sports outstrips traditional sports betting in Asia by a factor of 10. We’re going to be sponsoring e-sporting tournaments.”

Region

Sports betting by region (graphic by Bettium)

MC: How would Bettium transform betting on the Kentucky Derby?

NH: “I can remember in my childhood going to the dog races in Council Bluffs. You could pay 25 cents and add up run times and find the winner. And from time to time, you would win. A horse race is a race where access to big data is necessary. It was a muddy race this Derby. How do these thoroughbreds perform in this wet track? All of these factors can be analyzed to predict Justify would win, as in the 2018 Derby. But the change in weather should have shifted the odds of the race.”

MC: Let’s say you want to put up $100. Can you fractionalize that so 100 people could put down $1 to take you up on that bet?

NH: “Yes. We will be accessing neural nets, putting together all kinds of ways for people to match what they’re willing to bet. One guy wants to put in $2,000 and another who wants $3,000 and we will match bettors together. Eventually, we will have millions of bettors taking part in this site.”

MC: One thing that draws people into crypto as opposed to a stock portfolio is that you can actually just put in $1 in crypto to see what will happen and it won’t disappear into fees.

NH: “Traditional bookmakers will take seven to 10 percent with minimum bets. We are taking 0.15 percent only if you win. Your commission if you lose is 0.10 percent. And there is a third option where there is a draw. If it’s a draw, then people who bet on both sides will lose. We will be returning 60 percent of the money on a draw. We will have no bet limits. You win your bet with a traditional bookmaker. Ninety-nine percent chance, he’ll pay you out but the bookmakers can go bankrupt. All of these bets will be in smart contracts. Payout will be guaranteed and instantaneous.”

MC: What if I really just wanted to put $1 on each of the 18 horses in the Derby. Can I?

NH: “No minimums, no maximums. We predict we will have a lot of fairly small bets and we’ll be matching them with lots of bettors. It’s a very sophisticated match pooling. There is the problem of the central authority. We will be doing our best to follow the law. There are places where the legislation is unfair to bettors. When you are online, that doesn’t touch you. We will be keeping a very close lid on personal data. Our users personal data will not be at risk.”

MC: Your ICO includes the actual tokens—the BETT coin—that will be used to place bets.

NH: “Why do you need a token? This is a token with utility value. Everyone has a token these days. I know some veterinary offices that are paying for veterinary services with tokens. Our tokens will have demand long after our ICO. The long term of our token is bright. At the start of the ICO, It’s 5 cents, 1 million in circulation. We are sure that the value of our token will quadruple. Like everyone else, we will have a lockup with our tokens for the first 12 months. We will do everything in our power to keep the value of that token up. We want to be a good investment as a business in the long term.”

MC: I don’t gamble, but let’s say I’m watching a game with a buddy. We’re miles from the nearest ATM. Can the two of us make our own bet on Bettium?

NH: “Yes. You can identify your peer. I want to bet against Ralph. Here’s my hash, here’s his hash. Choose a betting event, chose a sport, choose a league. You’ll have your own wallet that you control. You’ll place your bet with Bettium tokens.”

MC: I understand your wallet analogy. So does that eliminate double-spending?

NH: “You have to put up that money to place a bet. Your account will be linked to a crypto wallet. But the bet isn’t active until you’ve stake the bet by putting up your tokens.”

MC: And I can make real money that day?

NH: “You just wait. The outcome of the sportscore will be known. We have oracles that will find the outcome of the event. It’s clear who the winner was. The oracle will determine who has won the bet. Money will be delivered from your smart contract the moment the game is over.”

MC: In Vegas when you win, you have to go get in line again.

NH: “Payouts are undisputed and instantaneous. The money is going to be credited to your crypto wallet. You can turn them into fiat if you want, same as any other cryptocurrency. Say I’ve got 20 bitcoins but I need $500. I just break off a little bit. We’re already partnered with a number of exchanges. You can send it to another crypto wallet. There are platforms we know such as DASH that you can connect to a credit card.”

MC: Is there another fee to get your money out.

NH: “Conversion won’t be our purview. Just like when you convert euros into dollars, there is a fee. We will certainly be partnering with good platforms. You’ll want to leave your winnings and most of your wealthy into a crypto wallet. But it does not make sense to change $100 into crypto, make a bet, win, then send it back into dollars and do it again the next day. That constant exchange will chip away at your winning.”

MC: What if I just want to bet on something stupid. Say I’ve got two friends who break up. Can I use Bettium to say, “Three-to-1 odds you two get back together.”

NH: “We’re not getting involved in underground betting. Our payouts are guaranteed, not manipulation of odds, no blacklisting for winners. We will even have tournaments for people to bet on bettors ability to bet. All of that will be far more preferable to the traditional system.”

MC: What about gambling addiction? Many crypto holders show signs of gambling addiction. Worse all the crypto apps work like slot machines (“pull down to refresh” is a slot machine tactic to keep you engaged, according to Princeton University). In Vegas, they use player loyalty cards to keep people in “the zone.” Your KYC data will tell you exactly who can’t walk away from a horse race or a boxing match. By putting more power in the hands of customers, you’re setting them up for that hit of dopamine even if they almost win, just like at a slot machine. How is your platform itself not going to become addicting?

NH: “We will have resources for people with gaming addictions. 1-800-GAMBLER is available in the US. We’ll have other resources available for customers abroad. We’re considering putting in place an analytical tool to see if people are making bets in an erratic way. We want to make betting the safe and fun past time that it is and should be.”

Brendan Sullivan is a writer, producer, and author of the memoir Rivington Was Ours: Lady Gaga, the Lower East Side, and the Prime of Our Lives. Disclosure: he owns cryptocurrencies. Follow him on Twitter.