Blockchain in Sports: e-sports, betting, ethical use 

Blockchain technology is a decentralised system for secure digital verification and storage of transactions and data, without the need for a central authority or intermediaries. Originally created for the financial sector and trading of digital currencies, blockchain has been growing its spectrum of possible applications in various other fields in the past decade, like healthcare, administration, supply chain, and sports.  

We have previously written about some early use cases of adoption of blockchain in sport. Projects using sport NFTs, or non-fungible tokens aim to boost fan engagement and loyalty and commercialise sport organisations’ digital assets. Another type of product based on the blockchain technology, DAOs or decentralised autonomous organisations, can allow for more fan participation in the management or sport teams and organisations. 

Sport NFTs can be footage from real sport events or sport-related 
digital illustrations
Sport NFTs can be footage from real sport events or sport-related digital illustrations

Here we want to continue exploring this trend and focus on some more recent developments related to the application of blockchain in sport – by looking into the areas of e-sports and betting. 

Blockchain in E-sports 

E-sports is a rapidly growing industry that has seen a surge in popularity in recent years. However, like others, it is facing challenges, such as security, player data management, corruption prevention, ensuring investment and marketing returns. With its transparency pledge, blockchain technology can offer many benefits to the e-sports industry: 

  • Decentralised platforms – building e-sport tournaments on decentralised platforms allows multiple stakeholders – game developers, sponsors, players, team managers, advertisers – to gather in a transparent fashion, without the need for a central authority.
  • Smart contracts – the use of smart contracts (a contract that is executed autonomously based on pre-set conditions) between organisers and developers, players and advertisers ensures everyone is rightfully remunerated for their contribution to the platform, as well as fair distribution of prize money.
  • Token-based in-game purchases and rewards – some e-sports platforms offer players blockchain-based tokens for in-game purchases and rewards, which are designed to be interoperable, meaning they can be used across multiple games and platforms.
  • Transparent player data management – the use of blockchain technology for recording, storing and handling of player data (for example, for player and team ranking) helps to prevent any form of misuse and misconduct in the e-sports industry.
  • Fan engagement and empowerment – Blockchain-based platforms such as Chillz and Socios are using blockchain to create fan engagement programs that allow fans to vote on team decisions, earn rewards, and even own a stake in their favorite e-sports teams.
E-sport tournaments are built on blockchain-based platforms for grater transparency and player security
E-sport tournaments are attracting ever more passionate players and growing numbers of fans

Blockchain in Sport Betting 

The field of sports betting has always been surrounded by a layer of controversy and risk of corruption. Blockchain technology has the potential to revolutionise the sports betting industry by offering greater transparency, security, and fairness to players, as well as expand the field of betting with the use of cryptocurrencies.  

  • The use of smart contracts can ensure that bets are automatically paid out.
  • Decentralized betting platforms enable peer-to-peer betting and eliminate the need for intermediaries, with increased transparency and security.
  • Anonymous betting is also made possible by blockchain-based betting platforms, which helps to protect participants’ personal information and privacy.
  • Using cryptocurrencies such as Bitcoin, Ethereum and others on betting platforms can offer greater security and convenience, instead of placing bets with traditional currencies which bear greater risk of digital misuse.
Sport betting platforms are often blockchain based for greater bettors security and to prevent fraud
Sport betting platforms are often blockchain based for greater bettors security and to prevent fraud

Ethical Use of Blockchain in Sport 

As it happens with every trend, the adoption of blockchain in sports has encountered some criticism.  

One being accessibility, whether in terms of financial costs for the implementation of a blockchain system, or due to varying levels of digital maturity. While we mentioned the potential of blockchain to democratise certain processes in sport, (like fan engagement, decision making, betting, data management, and more) some argue that its advantages are only accessible for more tech-savvy digitally literate pool of fans in developed communities, and sport teams and organisations with sufficient financial means to invest in these technologically advanced systems. 

The use of blockchain in also subject to regulatory compliance, as we’ve seen in the case of DAOs, but also in token trading, betting and data management. While one of the key benefits of using blockchain in sports is that it can promote transparency and prevent corruption and fraud due to its tamper-proof nature, as in any other industry, it is important to adhere to data privacy laws and prevent misuse of any stakeholders’ data without their consent. 

Blockchain is without a doubt a growing industry yet to reach its full potential. We will eagerly continue to follow its evolution as we strive to remain at the forefront of important developments in the world of digital technologies and innovation in sports.  If you are interested in the world of sport management and would like to stay updated on this area, follow our blog section and have a look at our academic programmes in sport science and technology, including our flagship Master of Advanced Studies in Sport Management and Technology.

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