It is that time of year again as the summer comes to a close the amount of events to bet on slowly grows: football in Europe has started, football in the states is in the preseason as the thrill of the Euros is almost forgotten and the Olympics past as a betting afterthought. With lockdowns that had people at home more than ever, both crypto and sports betting have taken off in high volumes and with new audiences. While the IT professional turned Doge millionaire and the sports betting fanatic turned NBA Top Shot NFT Guru look for something to do with their newly memed millions the convergence of crypto and sports betting is as ripe as it ever was, the fruit is nearly falling from the tree. While many outs take bitcoin and shitcoin alike more ecosystems are popping up as fungi grow under the fruit tree. Let us have a look at one such platform called BetU.
Sharps and Punters are not always welcome
The BetU website correctly states that for the most part, the sports betting industry is dominated by a few large companies, there are plenty of outliers, especially in crypto. There are a few other issues that anyone from your average punter to the sharpest of sharps has an issue with when placing bets, or attempting to. The first issue is that of geolocation and legality. While things have changed a lot in the USA and in some other countries it is not as easy to get a bet in as one would think. Using crypto as an on and off-ramp helps a lot to reduce this friction point and helps with a little, of what I like to refer to as „regulatory arbitrage“ which is what companies do all the time but your average Joe or Jane is not accustomed to doing. This simply means using a VPN or using a sportsbook that will take your bets when others won’t simply due to where you are located and/or who you are. Right now as it stands BetU plans on doing full KYC on all players. If you are unlucky and live in the wrong part of the world, then you will have to sit this one out. As BetU wants to get any and all licenses in the USA and elsewhere, while this could seem great on the surface, does your average punter really want to bet with a token? The answer has yet to be answered.
Another problem facing bettors is getting banned or limited. This often happens if players win. That´s right, if you are a winning bettor a lot of places want nothing to do with you, or will limit the amount you can bet. While it is within their right to do so this is an area where a platform like BetU could come in and make a difference. There is no talk of limiting players based on their betting activity.
Markets crave liquidity as Humans water
BetU is a sports betting exchange, that will also have a “bookmaking service”. That means you can post bets as a maker or a taker just like placing limit orders when you trade. While this does make it in a way fairer „be the book, set your own odds“ it can add friction to the betting markets. Simply put, there might not be enough liquidity for your bet, or you might not be used to using an exchange and the complexity will take you so long to figure out, the game will start and you won’t try again. BetU states in the whitepaper that they will provide liquidity in the form of the maker to get things started on the platform. This is on the one hand good and needed to get things started. On the other hand, if you want to be a maker then you are going to be up against the BetU market-making war chest that has been assembled from the recent ICO, and why should anyone else provide liquidity if BetU is going to do so without any set cutoff date? Does that sound complicated, the bookmaking service is designed for you.
Parlays and Teasers
A lot of bettors want to win a lot with a little bit of money. It is part of our human (ape) condition. That means the ability to place a 50 leg parlay or Tease all the NFL games on Sunday. Few to none crypto sportsbooks offer teasers but many offer parlays, however, the format of a betting exchange makes parlays more tricky, maybe BetU has a solution but these kinds of bets drive a lot of liquidity to all sportsbooks. No parlays? No teasers? No volume?
The BetU „bookmaking service“ is going to use odds from BetRadar. This is a widely used service and unless there is another market maker on the platform offering other odds with some decent liquidity there are not going to be better odds than at many other places. Good odds attracts users but the same odds plus added friction of a token, that’s tough. BetU thinks that providing a “bookmaking service” while having the p2p exchange at the sametime will lead to the best odds. I do not think it is quite that simple. The first asumption is that BetFair always has the best odds. This is simply not true, maybe in EPL but in other markets it is simply not the case. Blindly using the legacy markets of BetFair as a benchmark for bookmaking services seems counter intutative to trying to challenge the legacy system itself. One would need to provide — better — odds than BetFair as there are BetFair aggragators that are offshore and bitcoin sports exchanges both of which have the same or better odds as BetFair.
BetU is going to have live betting, that is great! However if the odds are the same as the other places and you cant create a 20 leg in game parlay then degerate ape hearts will be broken, and might not ever venure into the BetU world. +
Yes, there is a TOKEN
BetU allows bitcoin deposits and ETH deposits, but no Doge deposits. You will need to place all bets in the BetU token. When you deposit BTC or ETH you can then swap to BetU onsite which will use the pancake swap DEX to convert to the BetU token. They have set a max per swap of 10k USD value. This is a good way to do it if you have to bet in a token, however it still does not do away with the currency and liquidity risk you are compounding with the risk of your bet itself. Then if someone wins big, what might they do? Dump, market sell their winnings that is unless they like to gamble while they gamble while they gamble. Platforms that only allow betting in their token all have this same issue and it is one yet to be solved, if BetU has figured out a way to solve this issue is yet to be seen and I talk about it in this post I wrote a few years back.
Bribe the Oracles
While you might find what I have written about BetU so far pretty critical I do think they have come up with a pretty cool way to solve disagreements. If there is an event on the exchange that is not covered by the main API provider for example they might not cover AAA Minor Leauge Baseball, in this case, you have to put up a small extra deposit included in the bet, if everyone agrees who won and lost then you get the deposit back. If both bettor A and B claim they won the bet then of course something is up, one person must be wrong. In this case, the „Honest Bet System“ is used and community referees that are in part chosen randomly check the bet. They are rewarded for their effort from the extra deposit. All three referees need to have the same answer for the bet to be graded, in my opinion, this system makes it really hard to bribe the oracle, in this case, you would need to bribe all the existing referees since you don’t know which would be chosen and in the end most likely simply not worth even trying to cheat the system. There is also token burning, 25% of the market making profits from BetU itself, 25% from any winning fees (winner pays a fee), and 10% of the cheating attempt fees are burned. Again there is a dependency on the legacy system (BetRadar) while trying to fight against the monolply of the big providers. There are an extreme amount of legacy and crypto sportsbooks alike that depend on BetRadar and BetU will be yet another.
BetU is still in a very early stage, so early that it is not live! Although I have pointed out a few things that I think are going to make it hard to get new users there is still time to try to figure out a lot of these eternal problems that apply to nearly all sportsbooks, prediction markets, and exchanges. I always welcome new places to make a bet, lets see what BetU can do. Would you bet on BetU now? Or rather wait until you see more? Would you bet at BetU? Why or why not? Let us know in the commnets below. Untill then BOL…