Cryptocurrency & Esports Betting – a Bookmaker’s View

Leading esports bookmaker LOOT.BET recently shared the findings of detailed research into how crypto owners bet on video games. Several interesting trends were noted, including that crypto bettors tend to take significantly higher risks than those using traditional fiat currencies. To learn more about crypto’s place in esports betting, and how the industry has seen phenomenal growth over the past few years, we talked to Paul Brel, Head of Communications at LOOT.BET’s operating company, Livestream.

BITCOIN GARDEN – As your research suggests, the crypto and esports audiences tend to overlap significantly. So, how do crypto bettors differ from others, besides their appetite for risk?

PAUL BREL – One of the most notable traits is the typical crypto bettor tends to be a little older. This is easily explained when you consider that, to own crypto in the first place, you require either a reasonable level of disposable income or relatively advanced technical knowledge. Being more specific, while the average age of fiat currency bettors from the CIS and Europe is 21 and 24 respectively, the typical crypto bettor is 25-26. 

This age disparity implies some difference in occupation – and our research suggested precisely that. We found that fiat bettors from the CIS and Europe are likely to be students and entry-level or junior specialists/managers respectively, whereas crypto bettors are more likely to be further along in their career, and hence, earning more. 

B.G. – According to your research, crypto users place larger bets and also play slots more actively, compared to others. What’s behind this risk appetite?

P.B. – Cryptocurrencies have a history of being highly volatile, so we think it’s fair to assume that most crypto owners are probably more comfortable with risk than the average person. In the same vein, most crypto fans tend to be speculators too, actively looking to make their wealth grow, so again, they are used to taking risks in pursuit of their goals.

It also seems that cryptocurrency users who follow sports and esports tend to become proficient at betting very quickly, when compared to other alternative methods to increase wealth – for example, investing in stocks. So, maybe esports betting sits in the same ‘virtual comfort zone’ as crypto, appealing to the same fundamental mindset and aptitudes. 

And, as I mentioned before, the average crypto esports bettor is likely earning more than the average fiat esports bettor, so there’s the simple fact they can afford to bet more.

B.G. – How do you attract and engage with crypto owners?

P.B. – We are always looking for ways to improve the user experience for crypto owners at LOOT.BET. For example, recently we partnered with a cutting-edge crypto provider to ensure our Bitcoin (BTC) and Ethereum (ETH) transactions are lightning fast, and we added support for Litecoin (LTC) and Bitcoin Cash (BCH). 

Beyond that, we offer exclusive benefits for crypto bettors, like special bonuses. Right now, our customers can use the code ‘EPL’ to get a bonus worth up to €200, and a €20 free bet. 

B.G. – Taking into account the high volatility of cryptocurrencies, how do fluctuating exchange rates affect the volumes of bets placed?

P.B. – There is a definite correlation between fluctuations in the exchange rate of a cryptocurrency and the volume of bets placed with it. Specifically, there is an inverse proportionality. Take Bitcoin for example – when it goes down dramatically it’s betting volumes rise, and vice versa. Despite the correlation, it is usually dampened though. For example, if the price of BTC rapidly rises by 15%, we would expect the volume of bets placed to fall by around 5-7%, rather than 15%. 

It’s perfectly logical when you think about it, because despite the virtual nature of crypto, it is still very much a tool for capital accumulation to most users. 

B.G. – And, does that volatility imply any risks for a bookmaker?

P.B. – Not really, because in the process of placing a single bet, both the bookmaker and the client always use one specific currency, even if the client holds several currencies in their account. 

In our view, every serious betting or gambling industry player should appreciate it is now critical to support at least BTC and ETH, as a minimum. Both are now used by a significant percentage of the target market – illustrating this, here at LOOT.BET, BTC and ETH have now been the 2nd and 4th most popular currencies, respectively, for three years running. 

B.G. – How did esports betting become so popular, turning into a significant trend, in just a few short years?

P.B. – The esports audience is growing very rapidly. According to Newzoo, between 2017 and 2019 it snowballed from 355M to 443M, i.e. growing by almost a third. And, logically, the bigger the esports audience, the greater the potential for esports betting. 

But, there are other more subtle factors at work too. Chief among them is the fact that the esports audience is rapidly maturing. As time passes, more and more people who started following esports as teens become adults and can legally bet. 

Furthermore, over the past decade esports has rapidly morphed from a semi-underground and often misunderstood scene, into an established global industry, backed by major commercial sponsors, and featuring professionally organised and produced events. This process, which is still ongoing, has significantly shifted public perception for the better, legitimising esports as a whole. Esports betting operators have evolved with this change, and the industry is now led by well-run companies with a strong focus on corporate responsibility. 

This has led to esports being embraced by mainstream media, and millions of new people discovering that, by its very nature, it can be far more entertaining and intense than most traditional sports – especially for betting. 

B.G. – Why do so many prefer playing slots at LOOT.BET, which is a betting-first platform, rather than at the innumerable online casinos out there?

P.B. – We decided to become the world’s first operator to offer esports-themed slots because we appreciated that many esports fans also enjoy the instant thrill of slots, but don’t necessarily like the vibe at traditional online casinos. 

Basically, esports fans prefer the authenticity of a platform built and run by people who share their passion for esports. Couple that to the fact that our users already know they can trust us, and it’s far more convenient for them if they can enjoy a few spins on a slot in between betting on esports, without even leaving our platform, and it’s a no brainer. 

B.G. – How did the COVID-19 pandemic affect the esports betting industry?

P.B. – There’s no doubt that the mass cancellation of traditional sports, and the widespread lockdowns, led to a surge in people looking online for entertainment. This obviously gave a huge boost to video gaming and esports in general, and left esports as virtually the only option for betting.

Illustrating this, the average daily volume of bets placed at LOOT.BET grew by an incredible 100% per week during the initial stages of the ‘Great Lockdown.’ As the quarantines and restrictions were gradually eased, and classic sports got back underway, esports betting volumes did decrease, but it’s also clear that the industry got a long-term boost, and we expect esports betting to continue to grow faster than it did pre-pandemic. 

The widespread shift to remote working, which also seems set to be permanent for many, alongside a general move towards a more virtual online life, will also likely fuel the continued growth of esports and esports betting. 

It’s perhaps worth remembering that, even before the pandemic, some experts were predicting that, in terms of betting volumes, esports would catch up with classic sports in 10-20 years. Now, it seems likely it will do so much sooner, and even those bookmakers who were not taking esports seriously before the crisis are urgently investing in their esports offerings.