How crypto could be embedded in online betting – Crypto gambling
Tom Waterhouse of WaterhouseVC revisits the subject of crypto wagering and explores its potential as a cornerstone for next-generation sportsbook platforms.
In our previous discussion in May, we highlighted the substantial opportunities within the realm of crypto betting, which is currently experiencing phenomenally high growth in gross gaming revenue (GGR), estimated at an impressive rate of 36.6% annually.
Online crypto operators exhibit a user experience comparable to that of traditional fiat operators. Leading platforms such as Stake.com and Sportsbet.io are reporting remarkable turnover figures, emphasizing the market’s vitality.
White label platform solutions for crypto betting operators are becoming increasingly instrumental in the overall growth of this sector. These solutions minimize exposure to the operational and regulatory risks associated with singular crypto wagering businesses, enabling a more diversified approach to market entry and development.
Global crypto wagering data for total bets and GGR clearly illustrates the trajectory of this innovative segment. Source: Softswiss.
Existing Wagering Platforms
Numerous fiat-based operators are leveraging white label sportsbook and iGaming platforms, including industry leaders such as Kambi, OpenBet, and SBTech.
Yet, our research reveals a pivotal concern: many extant platforms were developed without fully addressing essential internal needs spanning marketing, trading, operations, customer service, and compliance.
In many cases, these platforms suffer from a lack of customization, with updates necessitating costly developments. Furthermore, inadequate customer profiling and risk configurations lead to suboptimal experiences for high-value players, resulting in substantial losses stemming from negative-value clients. Many platforms also struggle to meet evolving customer demands or provide tailored user experiences.
It is worth noting that all current platforms have their roots over 12 years ago, with some still relying on outdated technology. This technical debt accumulates over time and poses a significant challenge not only to wagering platforms but to technology companies across the board.
Crypto: The Future of Wagering Platforms?
The potential to create a new breed of wagering platforms is substantial, with the ability to seamlessly integrate racing, sports, and gaming alongside both crypto and fiat payment options. The following key platform capabilities will define this next generation:
- **Integrated Payment Flexibility:** Both crypto and traditional fiat options for users.
- **Enhanced User Experience:** A focus on personalized customer journeys using data analytics.
- **Regulatory Compliance:** Adapting swiftly to evolving regulations across different jurisdictions.
- **Advanced Risk Management:** Strategies to efficiently profile players and mitigate losses.
We are witnessing emerging investment opportunities in the development of these cutting-edge wagering platforms, which leverage modern technology and facilitate third-party integrations from inception. Unlike previous iterations, these platforms incorporate crypto functionality from the ground up, rather than as an afterthought.
Given the sustained increase in global crypto betting alongside the burgeoning online wagering market in the US, we remain optimistic about the potential that lies ahead. A crucial aspect of our investment strategy will involve identifying management teams with robust experience in the successful construction and operation of competitive platforms.
Since our inception in August 2019, Waterhouse VC has reported an impressive total return of 2,057% as of April 30, 2022, demonstrating our commitment to growth and innovation in the gambling sector.
