Blockchain technology could serve as a solution to some of the biggest problems in sports, according to a new report.
GlobalData’s Blockchain in Sport report suggests that blockchain could be used to help to address issues including ticket fraud, illegal betting and doping. The technology has already had a major impact on the sports industry through sponsorships by cryptocurrency companies, as well as the emergence of non-fungible tokens and digital tokens. However, it is suggested that the immutability of blockchain could strengthen the enforcement of regulations put in place to protect its integrity.
The blockchain software and services market has seen huge growth in recent years, and GlobalData expects this to only accelerate. Between 2019 and 2022, the embryonic market grew at a compound annual rate of 51%. That figure is expected to increase to 55% between 2023 and 3030, taking the value of the market from $12 billion to $291 billion in that period.
Of the technology’s role in sports so far, the report says: “With sports organizations being impacted significantly from the Covid-19 pandemic, the cryptocurrency sector created an exciting opportunity for sports properties, looking to generate some much-needed revenue. Many of the biggest sports properties, including the UEFA Champions League and Oracle Red Bull Racing, have signed lucrative sponsorship agreements with cryptocurrency companies over the last few years.
“The blockchain market has allowed sports properties to engage with a worldwide market that has substantial potential to grow significantly over the next decade. Modern-day sports fans, especially within the Gen Z group, are consuming sports content voraciously, with the younger audience interested in content produced outside of actual games as in the games themselves. Crypto is a route for sports teams to provide that content.”
Blockchain for tackling issues in sports
There are applications for blockchain in sports beyond commercial returns too, though. GlobalData suggests the technology can be used to tackle the continuing significant problem of online ticket reselling, with inflated prices and fake tickets proliferating.
The report states: “Blockchain offers a viable option to prevent this kind of fraud from happening, every purchased ticket being digitally unique, so people cannot enter with fake tickets and would be unable to purchase a huge quantity to unfairly sell on.”
It gives the partnership between Live Nation, which owns Ticketmaster, and digital ticketing service FanDragon Technologies (to sell blockchain-based tickets) as an example of where the industry is likely headed in the next decade.
“The system ensures that consumers can pay upfront for tickets, which is then verified by Aventus, a blockchain verification protocol,” it explains.
Similarly, the report suggests that blockchain could be used to combat the issues that have grown from certain companies holding a near monopoly on sports betting by ensuring that each transaction is recorded and transparent. It puts the value of the illegal sports betting market at between $340 billion and $1.7 trillion, compared to the $40 billion linked to legal markets in 2020.
“To counteract this, blockchain could offer a sense of transparency to an area that desperately needs more of it,” the report suggests. “A frontrunner in this new space is Betswap.gg, which claims to be the first-ever global decentralized betting exchange that offers an alternative option to the existing monopoly of betting exchanges. The service allows users to access their crypto wallet from anywhere, and place bets immediately, with all of the same benefits that other betting services provide.”
The report goes on to say that doping is an area of sport that can be “revolutionized” by blockchain. It again points to the technology’s transparency and immutability for this.
“Blockchain can play a key role in producing a tamper-free digital file to bring together all information and data regarding an athlete’s performance and their medical history,” it explains. “This would allow sporting organizations to access and share doping-related data with full transparency. Blockchain could guarantee traceable, unalterable data in these data passports, making verification much easier. This would boost support for anti-doping programs, which have been the focus of great scrutiny in the past due to various scandals across multiple sports.”
