Oh, crypto gambling it’s a wild world

Sky News invited us “inside the wild world of crypto casinos” this week, as it published a superbly formatted long-form feature on the emerging vertical.

The piece saw digital investigations journalist Sanya Burgess chart her journey into the world of crypto gambling, starting with a chance encounter with a video of rap superstar Drake playing roulette on social media.

“I was intrigued,” Burgess writes. “It’s not like crowds gather around punters chancing it on slot machines in pubs. Nor are there queues of spectators spilling out of betting shops.”

The video in question showed Drake win an eye-watering $6.7m on a single spin of the wheel, and left Burgess asking herself: “Why was one of the most famous people in the world streaming himself gambling online?”

In searching for the answer to that very question, she went on to discover “some troubling practices in this online community.”

“Some influencers are playing with ‘fake’ money provided to them by their casino sponsor and may also be breaking British gambling laws by promoting and showing how to access these sites, which are illegal in this country,” she writes.

Not that that has slowed the rising tide of online crypto-gambling influencers, she points out, with popular casino streamer xQc boasting a combined social media following of almost 17 million.

The rise of such influencers is a real concern for those seeking to tackle gambling harm, Burgess adds.

“While there’s evidence that watching these streams can help addicts satisfy cravings without using their own money, [clinical lead for the NHS Northern Gambling Service Matt] Gaskell warns there is a risk of a relapse because the sounds and images can trigger ‘physical and psychological reactions’ which could end up driving someone back to the casino.”

While streaming platform Twitch has taken its own, much-publicised action against such dangers, relatively new rival, which was set up by one of Stake’s co-founders and does not follow the same guidelines, reportedly hit 10 million users in July this year.

Add in the fact that streamers often have referral deals with online casinos, meaning they are effectively incentivised to turn viewers into gamblers, and Burgess suggests the phenomenon could be a recipe for disaster.

Readers are encouraged to check out this article in all its glory, which is a feast for the eyes.

Anyone remember NFTs?

Business Insider this week asked if readers remembered “when NFTs sold for millions of dollars.”

A far cry from those halcyon days, according to the article’s headline, “95% of the digital collectibles may now be worthless.”

The article points to a recent report on NFT collection valuations, which after studying more than 73,000 collections, found that almost 70,000 were now completely worthless.

“This daunting reality should serve as a sobering check on the euphoria that has often surrounded the NFT space,” the researchers said. 

“Amid stories of digital art pieces selling for millions and overnight success stories, it is easy to overlook the fact that the market is fraught with pitfalls and potential losses.”

Big names in the NFT space like Bored Apes and CryptoPunks changed hands for millions of dollars at the height of the craze, back when a single bitcoin was worth almost $70,000.

Today, however, 79% of all NFT collections remain unsold, “and the surplus of supply over demand has created a buyer’s market that isn’t doing anything to revive enthusiasm.”

Less than 1% of collections today boast a price tag of more than $6,000, the article suggests, while around 40% of collections are worth between just $5 and $100.

“It becomes clear that a significant portion of the NFT market is characterised by speculative and hopeful pricing strategies that are far removed from the actual trading history of these assets,” the quoted researchers said.

“Additionally, the apparent disconnect between listed prices and actual sales could suggest that many sellers are waiting for another massive surge in NFT interest akin to the boom witnessed in 2021, which may not ever occur again.”

To those holding on to their digital assets in the hope of the market bouncing back, there’s only one thing to be said: good luck.

Winners not welcome in Washington

The Washington Post this week brought us the unusual story of a successful gambler in Washington, DC.

After being limited on the state-sponsored GambetDC mobile app, the bettor took to wagering upwards of a million dollars on retail betting kiosks in a local poke restaurant, where bettors were not required to identify themselves before having a flutter.

After using discrepancies in the odds to extract significant value from the operator, the customer soon found that his betting was also set to be limited at Gambet’s retail locations, ostensibly as part of a new responsible gambling policy introduced by the state regulator.

Not only had this single customer “provoked city officials to limit how much he could wager in the District. He had prompted them to change the process by which anyone could be limited,” the story explains.

The change could further weaken an already struggling sports betting operation, The Washington Post suggested, as well as negatively impacting many of the operator’s retail partners.

“The episode provides a window into problems that have plagued Washington’s operation since its launch, according to observers of the D.C. betting scene: unsatisfied customers, unhappy partners in the restaurant business, uninspiring returns for the District government, perplexing decisions and a minimal response to public health concerns.”

All those elements have added up to “the worst rollout of legal sports betting in the US,” according to gambling media veteran Dustin Gouker. “It is the punchline of a joke at this point.”

The impact is not difficult to see. GambetDC users wagered $5.4m in June, $3.1m in July and $3m in August, while the betting industry in other US states continued to boom.

“There’s typically a drop between those summer months,” the Post points out, “but this year’s 45% decrease from June to August was far larger than a 9% decrease in 2022.”

To get the full lowdown on exactly what’s gone wrong in Washington’s betting scene, readers are encouraged to check out this long read in full, as it spells out the whole story in granular detail.

From the politics behind Intralot winning a five-year contract to operate the GambetDC app, to customers crossing state lines just to have the chance to bet with the brand’s commercial rivals, the story sets out precisely how not to roll out regulated sports betting.

Washington DC’s handful of in-person sports betting options continue to outdraw the city’s lone legal, District-wide mobile sportsbook, the only US jurisdiction with that distinction.

The Caesars retail sportsbook at Capital One Arena generated $5.7 million in handle in August, the single largest legal sports betting generator in the District. The DC Lottery-run GambetDC mobile book took in only $3.4 million during that same time.

For the year, DC’s retail books have made up more than 70% of the city’s total sports betting handle. In most other states, online wagering makes up 90% or more.

For fiscal year 2022 so far, the Capital One Arena book, home to both the NBA’s Washington Wizards and NHL’s Washington Capitals, has generated more than $104m in handle compared to $52.3m for GambetDC.

DC has three other live retail sportsbooks. The BetMGM book at Nationals Park, home to MLB’s Washington Nationals, accepted $2.5m in handle last month and has accepted roughly $29m so far in 2022. The newly opened FanDuel sportsbook at nearby Audi Field, home to DC United of MLS, generated $879,000 in handle in August and has so far taken in $1.7m for the calendar year.

The fourth live book, at Grand Central Restaurant & Bar in the city’s Adams Morgan neighborhood, accepted $451,000 in bets last month and has taken in $3.6m total in 2022.

DC law permits the in-stadium retail books to also accept online bets within a few blocks of the respective venues. However, this area is far less extensive than GambetDC, which is permitted to accept bets across much of the city.

The nation’s capital was one of the first jurisdictions to approve legal sports betting, but the online aspect has been criticized since the approval process began.

DC lawmakers gave Intralot, operator of the city lottery, a no-bid contract to run a de facto online monopoly in the city. Both the decision to prohibit a multi-operator marketplace, as well as give that lone license without a competitive bid, drew outrage from bettors and industry figures alike.

Gambet has been criticized for its limited betting options, interface, line values and a host of other issues. The app is also prohibited from taking bets on federal property, which covers much DC’s city limits, making placing wagers even more difficult.

These are among the key factors that have allowed the retail market – and the centrally located Capital One Arena book in particular – to dominate handle in the market.

Washington DC sportsbooks:

– Caesars, BetMGM & FanDuel have in-stadium retail books; mobile betting is permitted within a few blocks of the respective venues
– Elys is/will run "BetDupont" retail books at 4 commercial businesses
– GambetDC is the lone "city-wide" mobile app

— Ryan Butler (@ButlerBets) September 29, 2022

Meanwhile, Gambet has accepted nearly 1.75m individual wagers during the current fiscal year compared to just over 1m for the Caesars sportsbook. This indicates bettors looking to place larger bets are flocking to what they consider superior options, even if it means traveling in person to do so.

DC was the first American jurisdiction that permits both in-stadium sportsbooks as well as books at commercial bars and restaurants. Grand Central was the city’s inaugural in-restaurant sportsbook and gaming technology partner Elys has plans to open at least three more.

These strict limitations on mobile sports betting in DC has continued to hurt the revenue potential in the city, which has more than 700,000 residents and grows by several hundred thousand commuters from Virginia and Maryland each weekday.

Virginia (resident population 8.5m) has more than a dozen statewide mobile sportsbooks and generated $266m in handle in July, its most recent month with a publicly released revenue report. GambetDC generated $3.3m in handle during that same time.

Virginia sports betting generated roughly $31 per person in July 2022 compared to less than $5 per person for Gambet in DC.

Gambet’s struggles come as the same time the city’s other major neighbor, Maryland, has floundered trying to launch mobile sportsbooks of its own. DC, which is a short distance or Metro ride for several hundred thousand Marylanders, instead sees much of that money go to Virginia, offshore sites or unlicensed bookies.

Maryland residents statewide are also taking advantage of their own retail sportsbooks, several of which also outdraw Gambet. That includes the BetMGM sportsbook at MGM National Harbor, located a few hundred yards from the DC line, which accepted more than $9.6m in bets in August.