Sports Betting in the Metaverse

Metaverses are something that has gotten a lot of attention post-2020. Naturally, that is owed primarily to Facebook’s attempt to launch a virtual world that would change how people interact with each other. The project was announced via a video a few years back featuring Mark Zuckerberg and a digital avatar of him discussing all the features such a revolutionary platform would boast. He was super committed to the project, going so far as to change his company’s name to Meta. However, Zuckerberg’s metaverse never did get off the ground. It is still alive but is moving far slower toward realization than projected. Some of that is owed to Facebook’s/Meta’s flagship VR platform – Horizon Worlds not meeting expectations, as it does not have the anticipated user count. Nor does it achieve the expected engagement that Meta’s management hoped it would show. Horizon Worlds was planned to be the precursor to Facebook’s Metaverse, and it debuted in December 2021.

Facebook’s virtual shared space aside, many others similar to its vision exist now and are available for anyone to join. Some of these have been running since before Zuckerberg announced his plans for his metaverse in October 2021. Technically, the 2003 multiplayer multimedia platform named Second Life can be classified as the initial online metaverse. It is a massive online multiplayer RPG with no objectives or manufactured conflicts. Hence, it is not a game per se.

Today, one can say that Decentraland, Sandbox, Somnium Space, and Roblox are the most popular virtual worlds, with many of these featuring Ethereum-powered economies. That means users can transact via a native token in them. For example, Decentraland’s digital asset is MANA, the basis for its ecosystem. And in many active metaverses, gambling with native tokens, which are essentially cryptos that people can buy at popular exchanges, is happening right now.

The Current State of Metaverse Gambling

As noted above, some metaverses have had gaming venues operating inside them for some time now. It is vital to give a brief rundown of how these work, so that everything is clear when we get further into the topic at hand. In a metaverse, users buy plots of land. Some get them during an IPO (initial public offering), while others purchase them from other users. On these pieces of digital land, their owners can build properties, just like in the real world. Or they can lease the land, allowing others to build on it. In essence, these bits of data are viable real estate. Decentraland even has a district dedicated to gambling called Vegas City in the platform’s Genesis City area. It is there, that the video game brand Atari leased land for a virtual casino.

Decentraland’s most popular gaming establishments are its ICE Poker venue and the Tominoya casino, a Japanese-themed locale. The Sandbox has a Sand Vegas Club, which offers buckets of casino fun.

It must also be highlighted that these projects usually integrate NFTs, or non-fungible tokens (unreproducible digital assets), to represent ownership of things inside them. Their users can gamble via NFTs or native fungible tokens in their virtual venues, and metaverse gambling currently lacks a dedicated legal framework that regulated all this. However, some have argued that since these virtual venues facilitate gambling, they fall under state/country gaming laws, which has led to various lawsuits against them. That has occurred chiefly due to their failure to meet legal land-based/online gambling standards in a given region, one from which their operators’ function.

The easy fix for this is to simply move the servers to a territory with lax rules, one that has no issues with online gambling and cryptos in general.

Sports Betting in Metaverses

It seems like this is only a matter of time. It is understood that casino games are a far more appropriate form of gambling for a virtual world, as they are more interactive and supply instant gratification. Nonetheless, there is nothing stopping people from building sportsbook lounges in metaverses where users can hang out and bet on games using blockchain tech.

Most metaverses have been created with VR technology in mind. They have been built to facilitate a totally immersive experience, and various parties have experimented with blending the sports-watching experience with VR. For example, there was a Fox Sports app that allowed users to watch the Super Bowl in a virtual VIP lounge a few years back. Therefore, it is not out of the question that someone will construct a venue in Decentraland for sports betting purposes, where visitors could watch contests on jumbotrons and leverage blockchain tech for instant payouts. Moreover, since metaverses transcend geographical boundaries, anyone would be able to go to these virtual places, wager, socialize, and have fun. Such a move would democratize access to betting globally.

One major issue these projects may face is that the blockchain infrastructure we currently have in place on most networks may get suffocated by the high transaction volume that live wagering could generate. High latency/congestion during popular events may disrupt things significantly.

Prediction & Potential Impact

In all honesty, we thought that metaverse sportsbooks would already be a thing by now. We assume that no established brand wants to make this move out of fear that it may face scrutiny because underaged individuals can use metaverses to gamble. So, they do not want the bad press and potential legal ramifications they may face for playing a role in this. Still, it surprises us that no one has dabbled with at least trying to appeal to the eSports betting crowd, as these are tech-savvy people who have knowledge of blockchain ecosystems.

We would venture that it will take a few more years before active and new metaverses fully adopt VR and are able to provide the immersive experiences necessary for metaverse sports betting adoption, with high-end lounges that mimic real-world ones. Today, most of these virtual worlds have Minecraft-like graphics. However, in the next five to ten years, quality VR/AR devices will surely become more affordable, and virtual environments will become more lifelike and accessible to the public. At this time, traditional internet bookies will probably try their hand at forming partnerships with metaverse platforms, but under some oversight.

It goes without saying that the most alluring aspect of metaverse betting is the engagement possibilities this brings. It can potentially make the viewing experience more immersive than anyone could have imagined a few years ago. It would do this via various mini-games, novel social activities, and more. The betting would be more automatic/fair, with gamblers not worrying about bookmakers not paying out. Betting locales in metaverses will probably drive hordes of new users to these platforms.

Due to their unregulated—or likely poorly regulated—nature, concerns will probably exist surrounding how these immersive environments could increase gambling addiction rates, especially since they will probably be more stimulating than brick-and-mortar sportsbooks and lounges by a country mile. Their impact on younger demographics will result in cultural shifts, with betting becoming further normalized. That is something that many groups will not take kindly to, fearing the social effects on communities this will have.

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