US Racing (www.usracing.com), an international online horse racing service, reports a non-insignificant trend in cryptocurrency being used to place wagers on the Kentucky Derby to be held at Churchill Downs on Saturday, May 5.
On Saturday, millions of people around the world will be tuning in to watch the 144th Kentucky Derby. While some will make the journey to Louisville, Kentucky to place their wagers at the betting window in person, others will use their local OTBs. Even more people will be placing their Kentucky Derby wagers online at ADWs in the United States and international racebooks.
Over $100 million dollars was wagered on last year’s Kentucky Derby race (setting a new record) and many expect to see the overall volume increase in 2018.
Blockchain and Crypto for Horse Racing?
What was a nascent niche a few years ago has grown; increased acceptance by private gaming groups of bitcoin and litecoin from their customers has grown in tandem with the explosion of new accounts at exchanges like Coinbase, according to research by US Racing.
“Right now, while punters are limited to a handful of private international gaming companies that will accept deposits with cryptocurrency, players with crypto wallets can use bitcoin, bitcoin cash or litecoin to make a deposit and bet on the Kentucky Derby,” said Tim Maxwell, operations director of US Racing.
“However, both the legality and associated risk management of accepting cryptocurrency needs further clarification before we see widespread adoption in the gaming and racing industry as a whole. The violent swings in bitcoin prices can add another layer of risk management that some public companies believe do not justify the added convenience for providing this deposit method to [their] customers,” said Maxwell.
But just as organisations like OverStock.com, Expedia, Microsoft and Bloomberg have made the decision to accept payments in cryptocurrency, so will more online and land based casinos and race books.
“We expect a handful of publicly traded UK, Maltese and Canadian gaming companies to accept bitcoin deposits on a trial basis by early to mid-2019 followed by land-based race books and casinos in late 2019 and early 2020,” Maxwell added.
Ethorse* & Augur
“While you can’t bet on the horses with Ethereum just yet, ETH holders have the next best thing available from a new blockchain startup called Ethorse,” said Maxwell. At Ethorse, the user can back their favorite coin and win in the same way a punter backs a horse to win the Kentucky Derby.
Maxwell points out that “the concept of betting on the price of the coins themselves is not new, as there are various decentralized prediction markets online or in development like Ethorse and Augur.”
“Punters will be game for a flutter on whether BTC will beat XRP in a match up or if ETH will win by a nose. Just because it is blockchain doesn’t preclude people from making bets,” Maxwell said.
Indeed, further applications of blockchain should be considered in the horse racing industry as a whole, so that it levers technologies that can both protect the animals and their connections into the future.
* Update: The Ethorse project was shuttered in 2019.
The writing team at US Racing is comprised of both full-time and part-time contributors with expertise in various aspects of the Sport of Kings.