If you’re a sports fan of any kind, then you’re probably familiar with the concept of fantasy sports. Advertisements by web-based prediction companies constantly bombard viewers during commercial breaks — you couldn’t get away from them even if you tried. It has become so bad that even some public figures have expressed their complaints about it, with media outlets even doing entire stories on the phenomenon.
However, viewers may not have to wait long for someone to do something about it, because government authorities are already on the case.
On October 15th, 2015, the Nevada Gaming Control Board (NGCB) ruled that fantasy sports were a form of sports betting. Ironically enough, Nevada is one of the only states where gambling on sports events is actually legal. However, Nevada requires sports gambling companies to obtain state-sanctioned licenses in order operate within its borders. In order to obtain a license, fantasy sports platforms would have to become registered as sports gambling companies, which are illegal in almost every state besides Nevada. This would leave sports prediction companies like Fanduel and DraftKings with no choice but to close their operations in Nevada in order to stay open elsewhere. Fantasy sports games is estimated to be a $1.5 billion industry, and it isn’t illegal because federal law specifically exempts it from the ban on online gambling.
Still, fantasy sports games are illegal in 5 states despite the exemption from the overarching federal ban. This is important, as NGCB board chairman A.G. Burnett notes that there are now 40 states with casinos, each with their own gaming regulators. Furthermore, many of these states have contacted Nevada’s board looking for legal advice on how to apply their own laws to fantasy sports. This could possibly lead to more states enacting further limitations or outright bans on the industry in the near future. Such actions are already being considered in at least two states already, with the Illinois Gaming Commision stating that fantasy sports are under review. In Pennsylvania, lawmakers are set to introduce a bill that would require fantasy sports operators in partner with casinos in the state.
Some have defended stricter or redefined laws on fantasy sports operators on the basis that the industry is not appropriately regulated, and such laws will create a safer legal environment for consumers.
Pennsylvania Rep., George Dunbar, had this to say about the current legal environment of the fantasy sport industry,
“There’s no accountability no oversight. It’s the wild wild west. This will provide peace of mind to those who are playing fantasy sports.”
On the other hand, others have criticized the same laws as being influenced by monied interests that are lobbying for laws in order to gain an unfair advantage over competitors. Such criticisms could be warranted, as the traditional casino and gaming lobby has a history of lobbying for preferential treatment over online gambling. Over $17 million has been spent on lobbying efforts in 2015 alone, which actually is the lowest amount spent on casino lobbying efforts since 2001, according to OpenSecrets.org. Since 1998, over $400 million dollars have been spent on lobbying efforts by the casino and gaming lobby.
In light of all of this, the blockchain actually could end up having a featured role in the prediction market debate. The application of blockchain technology to online gambling and prediction markets have been at the forefront of Bitcoin 2.0 software for a while now. And it just so happens that Augur, an open source, decentralized prediction market, is projected for beta release at the end of Fall 2015, and for live release in the Winter of 2015. The project seeks to use the “Wisdom of the Crowds” in order to better predict future events. Augur is integrated with the peer-to-peer format of the blockchain, which will create what they call the “world’s first distributed oracle system.”
Augur was built using blockchain technology and utilizes the Ethereum platform. Ethereum’s smart contracts can be recorded onto the blockchain and are tied to certain conditions that must be met in order for them to be enforced. For example, with gambling operations, it would hold a certain amount of cryptocurrency in escrow (however much was bet on an event), and would be released depending on the outcome of the event. This takes human judgment and control away from the betting process, which guarantees not only that no one can renege on a bet, but that the money is also paid out to the right person.
Thus, a decentralized prediction market like Augur not only could disperse the control of gambling operations, but could revolutionize the entire gambling industry. It could also function as a better method of predicting the future itself, therefore reducing uncertainty. Who knows what the future may hold. In the not too distant future, It’s possible we may know.
What do you think about using the blockchain for sports gambling? Let us know in the comments below!
Source: CNN Money
Images courtesy of Pixabay, Augur.