Blockchain and Crypto in Sports: Slam Dunk or Hail Mary?

Wendy Glavin — Glavin's Tech Talk  |

Image: Spencer Dinwiddie, Brooklyn Nets

With the upcoming Super Bowl, I’ve been thinking about the millions of people who watch sports broadcasts on television and livestreamed events on their smartphones, tablets and laptops. Despite lower ratings during the last decade, 98.2 million people watched the 2019 Super Bowl. Baseball rankings came in second, followed by basketball.

Overall, sports fans spend more than $1 billion dollars supporting their favorite teams through ticket sales, sports memorabilia, such as jerseys, hats, sneakers, t-shirts, posters, signatures and more. Then, there’s fantasy leagues, sports and prop betting and gambling. Roughly 60 million people play fantasy sports, and of those, 80% play fantasy football, according to the Fantasy Sports & Gaming Association.

In our fast-paced digital world, consumer demands and habits have changed. First, people prefer to watch sports in their homes rather than go to live games which are expensive, inconvenient and weather-dependent. They also come with the uncertainty of who your seat neighbors may be. Will this be the day when you get doused with someone else’s 32-ounce beverage? Or worse? With Direct TV and NFL Red Zone, there are hundreds of channels and live coverage across the country, all of which has significantly improved the customer experience.

Where Does Blockchain Fit into Sports?

Like most industries, the sports business is a target for scammers, fraud and counterfeit goods. With mobile ticketing, distributors and consumers want to verify ownership and authenticity of their tickets in real-time. Other trust issues include the authenticity of team merchandise, sports memorabilia, online gambling, money laundering and corrupt practices by some players and coaches.

As a result, some sports teams and leagues are adopting blockchain and cryptocurrencies to tackle these problems. Blockchain’s core features are:

In 2014, The NBA’s Sacramento Kings became the first franchise to accept Bitcoin as a method of payment. At that time, the owners wanted to improve the customer experience by making it easier for them to purchase products and season tickets.

On January 15, 2020, the Kings launched the first-ever blockchain auction platform for authentic memorabilia with ConsenSys, a blockchain software development firm, for live bidding on in-game sports gear using Treum, a ConsenSys-backed supply chain product. Now, fans can securely purchase authentic game-worn merchandise with greater confidence than previously possible.

The Dallas Mavericks announced they would accept Bitcoin for tickets and merchandise in August 2019. Despite team owner Mark Cuban’s negative view of Bitcoin, he’s invested in blockchain applications for betting and gambling. Mavericks CTO David Herr said the team is interested in blockchain possibilities. “It’s crypto as a whole, that’s where we’re focused, not so much Bitcoin,” Herr said. “We want to make sure we have a platform that can engage with fans whatever currency they’re using.”

Before the current NFL season, the Miami Dolphins announced they would accept cryptocurrency payments in partnership with Aliant Payments and the Litecoin Foundation. Litecoin is the team’s official cryptocurrency. Attendees can buy 50/50 raffle tickets; half of which go to the Miami Dolphins Foundation and charitable causes.

In May 2019, NFL quarterback Matt Barkley of the Buffalo Bills revealed that he tried to get at least two of his previous teams, the San Francisco 49ers and the Cincinnati Bengals, to pay him in Bitcoin to no avail. Barkley posted on Twitter, that he’s mining crypto and he’s “all about @Ledger”.

Russell Okung, the Los Angeles Chargers left tackle and Vice President of the NFL Players Association is a huge Bitcoin supporter. After visiting his parents in Nigeria, he requested a bank transfer from his account in the U.S. When the bank refused, Okung began his journey into Bitcoin, tweeting that he wanted to be paid in the cryptocurrency. While the Chargers declined, Trezor. a hardware wallet distributor, got into the game by offering Okung a free wallet.

Okung explained:

Why Should Sports Fans Bet on Bitcoin?

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Crypto Contracts for Pro Sports Players

A prominent advocate of cryptocurrency is Brooklyn Nets guard Spencer Dinwiddie who has been negotiating with the NBA to have his contract turned into a digital bond called an SD8 security token. The goal is to engage with his fans by enabling them to participate and share in the potential upside and for him to get money upfront. It’s a way to decentralize personal loans through bonds backed by contracts as collateral.

Dinwiddie’s DREAM Fan Shares website has not updated, but the NBA expressed concerns about gambling and other issues related to the third year of his contract so it was revised. I contacted the NBA on January 21, 2020 for an update. NBA Spokesperson Mike Bass said, “Spencer Dinwiddie’s advisors provided us with new information regarding a modified version of their digital token idea, which we are reviewing to determine whether the updated idea is permissible under league rules.

Dinwiddie and other athletes are advocating for the adoption of cryptocurrency in sports. Blockchain, crypto assets and smart contract technology can tokenize athletes brands and offer more access to their fans. The athletes say it’s all about removing the intermediaries, and there are many who believe that teams and leagues would reap benefits also.

Brian Finkel, Deloitte Sports Research, Deloitte & Touche LLP said, “The fewer barriers there are between athletes and fans, the more commercial opportunities that will materialize. The value in having fans relate to their favorite players is immeasurable.”

What’s your game plan?

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Wendy Glavin is founder and CEO of Wendy Glavin Agency. Find out more at www.wendyglavin.com.

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Equities Contributor: Wendy Glavin

Source: Equities News

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