Since the United States legalized sports betting in 2018, the market has experienced significant development. Revenues for the industry reached $3.04 billion in the first half of 2022, a significant increase from the $4.3 billion total for the entire 2021 period.
Morgan Stanley predicts that by 2025, revenues will reach $8.5 billion, which would provide a further boost for the sector. However, as crypto enthusiasts are aware, rising revenues are always accompanied by rising scrutiny.
Massachusetts became the 36th state to legalize sports betting
On August 1, Massachusetts became one of those 36 states that legalized sports betting across the US. Along with Maine and Kansas, Massachusetts is the third state to legalize sports betting this year. California might be the next one to legalize it.
Advertisers and sports leagues are among those who benefited from the changes. The NFL received $1 billion in sponsorship money from FanDuel, DraftKings, and Caesars Entertainment during the 2020–21 season. They were not the only sponsors who opened their wallets. Some of the others were WynnBet, Fox Bet, PointsBet, and BetMGM.
Some people are already offended by the blatant promotion of gambling to sports enthusiasts. The co-director of the University of California’s Gambling Studies Program, Timothy Fong, is concerned that the industry is extolling an unattainable ideal.
Fong had a conversation with Grid earlier this month, and he said, “On social media, they will show a $10 parlay that made $180,000 and say that ‘this could be you. This is life-changing money, but in reality, this isn’t going to be you.”
In Fong’s opinion, this kind of campaign provides clients with instant gratification while downplaying or ignoring the risks it carries.
The medical community appears to mainly concur with this situation. The Mayo Clinic reports that compulsive gambling “is a serious condition that can destroy lives.” and that it can cause a variety of mental health problems, such as depression and anxiety.
Crypto heaven
Although the overall sports betting industry is already large and rapidly growing, the merging of this sector with cryptocurrencies offers new advantages and prospects. Transactions with traditional fiat currency on gambling platforms aren’t always easy. Punters and gamblers enjoy dogecoin betting, litecoin betting, and placing their bets using other cryptocurrencies.
Crypto offers a more efficient system. Drake, a famous rapper, wagered $1.26 million worth of Bitcoin at the Super Bowl earlier this year. As industry expert Anthony Pompliano noted at the time, “Settlement times are faster and the cost is cheaper. Bitcoin is superior from a technology format.”
This is the situation that industry experts and insiders share. Greg Dean of HotStreak recently stated in an interview with TechCrunch that “getting your money in and out is extraordinarily painful because payouts are tethered to legacy payment systems.”
The industry’s perception of the blockchain’s great potential is not surprising. Cryptocurrency may, however, offer a brand-new world of crypto betting.
The vilification of cryptocurrency users is nothing new. Darknet marketplaces such as Silk Road have faced similar criticism for having connections with the global drug market. Increased exposure and demand for cryptocurrencies could result from a gambling boom in the United States. On the other hand, this would also associate cryptocurrencies with yet another societal problem.
Do supporters of cryptocurrency want to be associated with another social vice? Whether the answer is yes or no, the issue is somewhat of a debated topic. The decentralization does not allow anyone other than government agencies to halt the convergence.
Gambling industry: Expansion in the US and decline in other states
The situation elsewhere is more complicated, even though the gambling sector is growing in the United States. The gambling industry is stable or, in some cases, declining in the United Kingdom, Europe, and Australia.
Although the UK has legalized gambling since the 1960s, recent regulatory restrictions have made the gambling market more challenging. Some sectors are even facing a decline due to strict regulations.
According to Morgan Stanley, “While today the US regulatory environment is expansionary, in Australia and Europe it is contractionary, highlighting long-term risk.”
If the U.S. adopts the U.K. model, one possible area for regulatory enforcement may be in advertising. Federal laws in the United States previously governed the languages, for instance, the terminologies used for promoting casinos. It’s possible that in the future, sports betting operators will also be subject to these regulations.
However, for the time being, any regulatory restrictions seem to be very speculative. For good or bad, cryptocurrency and sports betting have a long way to go before they become mainstream. Whether they will be widely accepted or not, it’s a moot point.
