Micro Sports Betting

As Old Betting Laws Fall, New Technology May Prevail

Bottom of the eighth, bases
are loaded, scores tied with two outs. The batter steps to the plate as the pitcher and catcher sign quickly to each other. The crowd, already on edge, stares intently at their phones. Panicked tapping ensues as bets are placed. Two to one strike. Five to one bunt. Three to one foul ball. As the batter winds up for the pitch, screens freeze; betting is now locked. “THWAP” The ball goes flying through the air as do millions of microtransactions. Fractions of a Bitcoin, known as a satoshi, are won and lost in the time it takes to swing a bat. As the debits complete, fans peck at their phones, eager to log their bets before the next batter reaches the plate.

Welcome to the world of microbetting. As the Supreme Court struck down the Bradley act this week, a Clinton-era federal bill banning sports betting, new technology comes to the forefront of sports entertainment. And this new form of sports betting won’t be limited to Major League Baseball. Fueled by digital currencies like Bitcoin that allow for transactions of one hundred millionths of a cent, and ubiquitous high-speed connections, fans will soon be able to wager on ever play, shot, swing, and serve.

To the benefit of “the house”, the technology for such a system is already in place and the tech industry may be surprised at who holds the keys to this proverbial kingdom. After the economic crisis hit its worst in 2008, FanDuel premiered and dominated as the place for online betting against fantasy teams. The algorithms behind these new fantasy sports betting companies are staggering in both scale and complexity. Processing a massive number of statistics for each player, the algorithms can determine the likelihood that a pitcher strikes out, that a runner steals, or that a batter hits a homer across the back wall. Combine these algorithms with an infrastructure large enough to calculate, serve and log bets instantaneously and you’ve pioneered the microbetting platform.

But will fans really be willing to bet such small amounts on every minute action of a player? And what will it mean for viewership? Recent studies including NFL Season Recap — It’s All Over But The Crying (MoffettNathanson, 2017) suggests that viewership of all games could increase as much as ten percent in the first years as sports fans, who aren’t usually betters, take up the new form of sports gambling and untold numbers of betters begin sports viewership. Add to this the efficiency of microtransactions, as shown in mobile and console gaming, and allowing fans to wager fractions of a cent, while seemingly miniscule, add up to big gains for betting houses, and small losses for fans.