US Supreme Court Decision May Have Just Opened The Field To Blockchain-Based Sports Platforms
Since the enactment of the Professional and Amateur Sports Protection Act (PASPA) in 1992, the U.S. Supreme Court has stood by the notion that states, other than Nevada’s sports wagering industry, cannot legalize sports gambling in hopes of protecting the integrity of the sports industry.
But, it wasn’t until Murphy v. NCAA, and the SCOTUS’ May 14th decision, did it officially rule on this issue, rejecting the state of New Jersey’s partial repeal of its own sports betting law, as it applied to casinos, racetracks, and former racetracks and whether it complied with PASPA. In Murphy, New Jersey argued that PASPA violated the Tenth Amendment to the U.S. Constitution, reserving all powers not delegated to the federal government, to the states. In its May 14th decision, the Court struck down PASPA in efforts to remedy the state’s ailing casinos and racetracks.
Justice Samuel Alito, a New Jersey native, wrote the court’s majority opinion in the case, indicating that “Congress can regulate sports gambling directly, but if it elects not to do so, each state is free to act on its own.”
So, how does this decision impact the future of the space as blockchain technology and cryptocurrencies come into play?
The “House Doesn’t Always Have to Win”
Well, it’s safe to say “the house won’t always win” anymore. The origin of the phrase “house always win” when it comes to casino gambling comes with the implication that things aren’t as transparent as they should be, if at all.
With Blockchain’s distributed ledger technology, this could help to provide for a completely transparent environment where individuals are able to have a good time on an even scale. Additionally, casinos would be in a better position in verifying identities, flagging potentially problematic transactions, and even ensuring compliance with anti-money laundering regulations and tax distributions.
Take, MyDFS, for example, which has become one of the first blockchain-based daily fantasy sports platforms in Eastern Europe, bringing a whole new level of simplicity, security, transparency, and fun into this emerging world of fantasy sports.
As initially published in a previous article of mine by NullTx, formerly known as The Merkle:
MyDFS is slated to change how daily fantasy sports are played, by bringing a level of transparency and ease-of-use that just isn’t there on traditional platforms. Because the platform is entirely on the blockchain, all player actions are recorded on an open digital ledger, meaning issues of foul play and cheating are practically non-existent. It will also offer unique ways of participating on the platform, with the main one being investing in other players that actually play on the platform. Instead of simply betting on teams and player loadouts, users will be able to use the token to bet on the pro players that consistently have strong showings and payouts. It’s almost like profit-sharing in that you’ll get a percentage of the winnings that those players make during their sessions. And because everything is on the blockchain and verified through smart contracts, payouts and confirmations will happen almost instantaneously, as the smart contracts guarantee accuracy.
But, how will platforms like MyDFS impact the industry moving forward, especially in light of the recent SCOTUS decision?
According to the American Gaming Association President, Geoff Freeman, the ruling now makes it possible for states and sovereign tribal nations to give people what they want—an open, transparent, and responsible market for sports betting. This is where blockchain technology and tokenization models come in.
#1 –New, Decentralized Betting Applications For the Fans
#2 –Efficient Tracking of Transactions for Platforms and Casinos
#3 –Compliance With Tax and Anti-Money Laundering Regulations
By legalizing sports gambling, fans are now able to search the webs for decentralized applications that aim to bring fantasy and entertainment into the pockets of its users.
Utilizing this technology and implementing smart contracts, ushers in a new era for daily fantasy sports, no different than that of the banking and real estate sectors. By mobilizing platforms into applications for the smartphone, sports like soccer, hockey, basketball, and football are made available on a global level.
“We are excited to be the first platform to bring fantasy sports onto the Blockchain, as the digital ledger can solve many question marks related to user experience and transparency,” said MyDFS CEO, Viktor Mangazeev. “It also offers people new ways to play—especially those who are less familiar with fantasy betting.”
“It’s always especially exciting to take a market that’s already growing on its own and to give it an extra boost,” Mangazeev added. “We’ve used blockchain to solve some of the biggest challenges facing fantasy sports—an industry I know quite well—and have also built-in exciting additions like private tournament entry and smart selection features, which can help draw in new players.”
The National Collegiate Athletic Association (NCAA) along with the NBA, MLB, NHL, and NFL are urging Congress to this time, enact a core regulatory framework providing for legalized sports betting, which will help to ensure the integrity of the game.
Online Fantasy Sports Sites
“The Supreme Court’s decision, which paves the way for states to legalize sports betting, creates an enormous opportunity for FanDuel as our platform, brand, and customer base provide a unique and compelling foundation to meaningfully participate.
At our core, we’re a business that makes sports more exciting. In the same way, we revolutionized fantasy sports, we will bring innovation to the sports betting space. This decision allows us to bring the passion and engagement we have seen among our users to new and expanded marketplaces and create a sports betting product that fans will love. FanDuel is and will continue to be the premier mobile destination for every sports fan.”
“Our mission has always been to bring fans closer to the sports they love and now, thanks to the wisdom of the Supreme Court, DraftKings will be able to harness our proven technology to provide our customers with innovative online sports betting products. This ruling gives us the ability to further diversify our product offerings and build on our unique capacity to drive fan engagement.”
—Jason Robins, CEO of DraftKings
What’s The Next Play?
The recent SCOTUS ruling is just the beginning when it comes to understanding and attempting to regulate sports betting. As new platforms and technologies are implemented through the blockchain, the next whistle blown is who lays claim to part of the betting pie—the betting site? States? User? Sports team?
This will continue to puzzle not just the courts, but regulators, including the SEC who is still trying to wrap their minds around what Blockchain is and distinguishing securities versus utilities. For right now, fans and players should rejoice as these decentralized apps, or DApps are making online sports betting more interactive and entertaining.