Sports betting is a famously frustrating venture—and not just when players fail to sink the basket at the buzzer. Taking part in an industry known for its notoriety, hopefuls can be stung by shady antics that prop up the practice.
Touts—people who publicize their bets and encourage others to follow them—often talk about hot streaks but are not required to show bettors the history of their picks. Certain individuals remove bad choices from their record, causing bettors to lose money. Sportsbooks, too—the establishments that set odds and take bets—can be guilty of dishonesty. Disputes over the resolution of wagers are not uncommon, and businesses sometimes renege on a bet after the fact, or fail to pay out on time or in full.
According to Vancouver company FansUnite, there’s a simple solution to those problems.
Currently, FansUnite exists as a social platform designed to create transparency in the touting industry. Offering users the chance to play with virtual currency, the website encourages individuals to place bets while the platform tracks and analyzes their history. As a result, it’s possible to find trusted experts and make more money through betting.
Now, cofounders Darius Eghdami and Duncan McIntyre want to develop the concept further using blockchain technology.
“It’s quite a new idea,” Eghdami, the company’s CEO, tells the Georgia Straight on the line from his Yaletown office. “Because of that, there are some limitations and challenges for building a platform out, but we’ve assembled a great team and we’re hoping to launch before the end of this year.”
Eghdami wants to convert FansUnite’s virtual currency into tokens that have financial value—or, in other words, create their own cryptocurrency. To spend the tokens, an individual would log in to the app and place their bets online. Those picks would then be locked into a “smart contract”: a way to exchange money without a middleman.
Smart contracts cannot be tampered with. Written onto the blockchain (a database copied onto multiple computers), they exist in many different places all over the world and require a consensus to execute—meaning that if the terms of the contract look different on one machine, it won’t impact the veracity of the agreement. Because the blockchain database is transparent, anybody can view the smart contract, and everyone can be sure that it is correct. As a result, the contract can execute itself automatically and pay out any wins immediately, without requiring a central party to validate it.
Eghdami believes that using blockchain technology for betting not only will restore trust in the industry but will allow individuals to make more money by reducing the fees associated with the practice.
“The biggest hook for us is that we don’t have the massive overhead costs that most of these sportsbooks have,” he says. “Sportsbooks charge anywhere from five to 10 percent in fees per bet. That means that bettors have to win 53 percent of their wagers to be profitable. We are able to lower that down to two-percent fees, which are the lowest fees in the industry. With us, you only have to win 50.5 percent to be profitable. A typical sports bettor wins 52 percent of the time, so we give individuals the greatest chance of profitability.”
One of the ways FansUnite is keeping its costs down is by training machines to pick winners rather than relying on humans. The company shows video data to computers and uses machine learning to create algorithms that can accurately select the best odds for a match. Currently boasting an excellent record for baseball games, the company hopes to extend that to sports such as basketball and cricket in the near future.
“We have a couple of experienced machine-learning data scientists on our team,” Eghdami says. “Other companies aren’t using that technology. Our mandate for FansUnite is that we want to try to replace humans with machines. We’ve talked to other people in the industry and they’ve said that we’re miles ahead in the space. Now it’s just about executing and putting it out there.”
Eghdami, who secured $4.457 million in funding in late May, is optimistic that his platform will become the norm for sports betting.
“There are other cryptocurrency sportsbooks doing tremendous volume,” he says, “but we’re hoping that the odds we can provide people with will hook them to come and use our platform. If you go on a traditional sportsbook, you put $100 on a spread bet, and you win, they’re going to return you about $91. On our platform, we’re going to return you about $98. That’s a pretty big difference.”
Follow Kate Wilson on Twitter @KateWilsonSays