The use of Bitcoin and other cryptocurrencies in betting is becoming a common phenomenon. Bitcoin gambling in horse races is the new trend that continues to take race tracks and casinos by storm, as well as, all Bitcoin casinos. For the first time on May 5th, gamblers and horse enthusiasts attending the 144th Kentucky Derby got a glimpse of what bitcoin betting could look like, as crypto bets were available for the first time in the history of gambling on the sport.
Dubbed as one of the biggest and most beautiful horse races in the U.S., the Kentucky Derby drew in gamblers from all walks of life, some on the racetrack and others in casinos, and sportsbooks online, such as the bitcoin-accepting Nitrogen Sportsbook and Casino. Last year, over $100 million was wagered in the derby and with a chance to earn cash with bitcoin, left the crowd wanting more. This year betting volumes were highest in years, thanks to the inclusion of Bitcoin as a payment option.
While the horse Justify won the race, the real winner was Margret Reid from Texas. She made an $18 parlay that turned into $1.2 million. Ms. Reid wagered $18 on a ‘pick five’ bet whereby she bet on five races including the Kentucky Derby which was the main event of the day. Reid’s haul made her as successful as the winning horse whose owners walked away with $1.4 million.
Away from the race track it is the manner in which people were able to place bets that remains the topic. For the first time, players with crypto wallets were able to place bets on their favorite horses using some of the most popular cryptocurrencies in the name of Bitcoin, Bitcoin Cash, and Litecoin.
The emergence of Bitcoin betting underscores how virtual currencies are slowly finding their way into various mainstream industries. The Kentucky Derby is not the first gambling event where digital currencies have been used to make and settle bets. However, it is the first mainstream American sport to accept wagers with BTC.
A number of bitcoin casinos have been accepting such payments for some time as betting companies continue to explore new ways of meeting the demands of their diverse customer base. The Bitcoin Casino is a new online casino that allows people to play games online and pay using bitcoins.
Once a nascent niche, crypto betting has exploded in popularity, in recent years, thanks to increased acceptance of bitcoin and Litecoin among private gaming groups. In 2013, Bitcoin gambling accounted for 50% of all bitcoin transactions. But not bitcoin is more mainstream that it is not just for gambling.
Just the way mainstream organizations such as overstock.com, Expedia Microsoft, and Bloomberg have embraced cryptocurrency payments, so are online, land-based casinos and racebooks racing against time not to miss out on the new trend.
A startup by the name Ethorse swayed by the widespread adoption of cryptocurrencies has already developed a game that works the same ways as horse racing. Instead of players betting on real horses, they are made to bet on other cryptocurrencies.
Some betting companies have gone overboard in a bid to encourage the use of bitcoin and other cryptocurrencies in casinos. Some sportsbooks have opted against charging fees on bitcoin deposits as a way of encouraging people to deposit more in their platforms.
Some sportsbooks do offer bonuses for users wagering in digital currencies. Online gambling giant, Bovada, for instance, allows gamers to withdraw and make bitcoin deposits more frequently than they would be able to do with fiat currency. Bookmaker, 5dime and Topbet are some of the other betting platforms that have embraced cryptocurrencies payments.
Crypto Betting Major Hurdles
Even though BTC gambling, as well as, the use of other cryptocurrencies is on the rise, the trend continues to face a lot of challenges. For starters, very few financial institutions and betting companies accept blockchain based payments. In addition, cryptocurrencies price swings is another major headwind that poses the biggest threat to crypto bets.
Unlike fiat currencies, virtual currencies are extremely volatile something that affects their value making them undesirable for things like betting. The fact that these modes of payment are extremely unstable is one of the reasons why many betting companies have shunned them, stifling widespread adoption. The ramifications of casino and betting sites accepting bitcoin payments are enormous.
For example, a bet of $3 made and paid out in Bitcoin could gain or lose value in a matter of minutes. Enormous fluctuations could lead to potential losses or wins, a risk that most betting companies are not ready to bear. Unless something is done to ensure fluctuations in cryptocurrencies prices does not affect bets placed, then the emerging bitcoin betting trend could fizzle out with time.
According to Tim Maxwell, operations director for U.S Racing, a lack of clarity with regard to the legality of cryptocurrencies is another challenge that has affected widespread adoption of cryptocurrencies in the betting world. The risks associated with digital currencies, right from price fluctuations, will also have to be sorted out before such payments become a major factor in the gaming and racing industry.
Amidst the legality and risk issues, a number of betting companies in the U.K., Maltese and Canada have hinted at the possibility of accepting bitcoin payments as early as mid-next year. Depending on the outcome of the trials, such payment options could become a reality inland-based racebooks and casinos, late next year or early 2020.