Online betting, which has always been popular since its inception, saw a dramatic explosion following the start of the pandemic. People desperate for entertainment, when outdoor leisure and sporting events were closed, turned to online forms of entertainment. Online betting was one of the beneficiaries of this new trend with the sector having grown from **$465.76 billion in 2020, to $516.03 billion in 2021, and the market is expected to climb to $674.7 billion in 2025.
However, ask any seasoned online gamer or bettor and they will likely tell you that betting online comes with a host of problems and frustrations for them. These include the lack of transparency and fluctuations of fixed betting odds, bet settlement delays and even winning bettors having their accounts limited due to the success they have enjoyed. For these reasons alone, it makes a lot of sense to migrate betting onto the blockchain.
This means that users are paid out automatically, it means they cannot have their accounts limited just for winning too much, and it also means their personal and banking data is not exposed to hackers. The blockchain automatically verifies transfers and activities and it keeps this data on thousands of nodes worldwide, giving hackers limited opportunity to steal their data from a single company server.
As users are depositing with their wallet address and not their credit card, this keeps the entire process of betting anonymous, and also means that the user does not need to jump through the hoops of due diligence when onboarding. KYC for an online casino is a process that consumes a lot of manpower and energy, it also sees a large chunk of registrants dropping out before they even complete the process due to its complexities. Take away the KYC, the storing of a user’s credit card data and personal data, and give no chance for the casino to manipulate odds or delay withdrawals, and you have a winning combination.
We spoke to Paruyr Shahbazyan, the co-founder and CEO of Azuro, a blockchain-based betting protocol tackling all of the problems of centralized betting. He describes the benefits of the blockchain in this capacity best.
“The usage of blockchain as a base infrastructure for betting will add more value and fairness for the betting industry. First of all, blockchain brings full transparency where all transactions and parties are visible. As said previously that’s great for the players, but not only! It also solves other problems in the traditional betting industry like for example “affiliate shaving”. Centralized betting operators often stop paying commissions to their partners (called affiliates) which refer new bettors to the bookmakers. The phenomenon is called “affiliate shaving” and it basically happens because affiliates have 0 visibility of what happens on the bookmaker side and if the players they have referred to bookmakers are active or not, and so forth.”
“Blockchain is solving this issue. The bettor is represented by a crypto address. And you can easily see whether a given address is interacting with Azuro’s smart contracts or not. Plus the affiliate commission is set in the smart contract and cannot be changed. This means that the affiliate will get a guaranteed lifetime commission for all of the bettors’ activity that he provides. No more “affiliate shaving”!”
“In addition, blockchain allows for betting to happen without players having to give their money to a 3rd party which can do with the money as they please. This is possible because, on the blockchain, betting happens with the bettors’ funds placed in smart contracts (which pay out winnings automatically and immediately). On the contrary – currently (and without blockchain) players’ money is deposited with the bookmakers and the bookmakers decide when and if to pay-out winnings… Which often results in delayed or declined pay-outs.”
A: Users can bet with Azuro in a trustless way. No one can influence how Azuro’s smart contracts will resolve. Plus we are democratizing the business of betting as a whole. It is well known that the betting industry is very capital and know-how intensive with high barriers to entry. With Azuro, we are breaking down the role of a betting operator into several smaller roles, making it available to anyone who wants to benefit from liquidity and data provision, front-end development and operation, and decentralized governance. This means more value is shared with more participants in the ecosystem. Plus, we have a commitment to social responsibility from the very beginning that is unique to our project.
A: First of all, Azuro is a global decentralized betting protocol, utilizing smart-contracts to bring full transparency to the betting process while delivering a classic betting experience with plentiful markets and liquidity.
The core goal is to give bettors a trustless alternative to betting, which is on par with the experience they can get with traditional bookmakers. As we do that, we remove the issues with trust and transparency between players and operators prevalent today.
Azuro breaks down the role of a bookmaker into several smaller roles openly available for anyone to benefit from liquidity provision, front-end management, data provision and decentralized governance.
A: That’s right. I was a professional sports arbitrage player for nearly 10 years back in the day. As such, – I can assure you that the betting industry lacks fairness and transparency! The reason is the system built on negative incentives which put bookmakers and players against each other. Players and betting operators do not trust each other, smart players are being blocked, etc.. I got banned by many bookmakers and I couldn’t get my winnings out from many of them, too. These problems have created a niche for my own business – Bookmaker Ratings, which I started about 10 years ago, almost as an act of revenge because of my experiences as a player…
A: I started Bookmaker Ratings, which is the biggest online media about sports betting in Eastern Europe. The business focused on a simple thing: the lack of trust between players and bookmakers. So, we were objective in our ratings and did whatever we could to help players mainly by acting as an intermediary and resolving disputes between the two sides. Through this, we managed to have more than $12 million returned to players over the years, which ensured we gained people’s trust. This was all possible because we were driven by a deep understanding of the players’ problems.
A: We can see how other traditional industries like finance, data storage, content generation etc. got promoted and improved through blockchain decentralization. In the case of betting, the traditional betting market we have right now (including the billions of bettors) might need some time to adapt and migrate onto blockchain.
As this happens though – the full power of decentralization will completely disrupt the betting industry and provide transparent and efficient betting to everyone. Initially, the biggest portion of users will be a mix of traditional bettors who are more tech-savvy and have tried or are open to try blockchain applications and crypto native users who are enjoying new ways to benefit from blockchain betting like farming, liquidity provision and staking, as will be possible when Azuro Protocol’s mainnet is live.
A: I would like to mention NFTs and the way they might impact betting as well. In my opinion, NFT technology allows for true innovation that will enrich the betting experience dramatically, in a positive way. We create the opportunity for secondary markets (bet cash-out or purchase with a discount, markets for memorable bets as collectibles) and lots of engaging gamification that turn the usual betting experience into something more engaging and exciting.
Thus, each bet on Azuro is an NFT and it has two functions. Until the moment of settlement of the bet, it is a financial NFT. It can be traded on our marketplace. Let’s say you have placed a bet and for whatever reason you decide that you do not want it to play out (you want to cash out before the event is played). You can sell it on our marketplace. And the buyer gets your bet with a bit of a discount, thus getting an edge in terms of the price vs probability of the outcome.
After the bet is settled it stops having value as a financial NFT, but it can still have value! Since the most popular interesting formats for bettors are either some crazy winnings or some very upsetting losses. Both types of stories are actively shared and discussed in betting communities. And our NFTs are 100% proof of those stories. I often refer to Maradona’s “hand of god” moment to describe the historical value of an NFT bet. Imagine someone had lost or won a large amount because of that crazy goal. I think such an NFT would have had massive value as a collectible.
Besides that, users can be rewarded with NFTs for a variety of achievements while placing bets on Azuro (e.g. the longest winning line, awkward losses, highest odds won, and so on – the possibilities are virtually infinite).
Unhackable, unimpeachable, no third party intervention, so tamper-proof, it seems clear that the blockchain proposes a complete makeover of how online betting is conducted, and it seems that the bettors would agree. On-blockchain betting has gone up 121% in terms of unique active wallets reaching more than 754,000 unique users in Q3 alone, representing nearly 50% of the entire sector activity, and with this kind of monthly growth, it shows no signs of slowing.