Cryptocurrency betting: Driving forces for growth – technology and innovation

iGB brings readers a new column, from Tom Waterhouse of WaterhouseVC. In this first installment, he analyzes the companies that will be driving the growth and adoption of cryptocurrency betting.

The growth of crypto betting and Web 3.0 has disrupted traditional betting.

The betting system in the real world is completely rebuilt in virtual worlds such as Decentraland, providing both opportunities and risks for well-known operators.

In Decentraland, players must first buy or transfer cryptocurrency tokens (MANA or DAI) to their Decentral Games wallet, which they can share in certain games.

Online crypto operators, which have a similar user experience to online stock operators such as FanDuel and DraftKings, are already seeing extraordinary returns.

In the third quarter of 2021, the total number of bets placed using cryptocurrency increased by 181% year-over-year, while the share of crypto bets (43.3%) is fast approaching (source: Softswiss).

For example, crypto-focused Sportsbet.io (not to be confused with the Australian company “Sportsbet” owned by Flutter) has a monthly turnover of $2.7 billion.

To put that into perspective, in 2021, Australia’s largest operator averaged $1.2 billion in revenue per month and had about 50% market share in the country.

Sportsbet.io has partnered with many famous football clubs including Arsenal, Southampton and Sao Paulo.

The fund specifically focuses on companies that provide a basic B2B service to gaming and betting operators. Examples include investments in race data providers, voice and text betting solutions, and affiliate marketing services.

One interesting company we saw on the Metaverse is Admix, which was founded by Sam Huber in 2017.

Admix’s primary business is to create and publish in-run ads that do not affect the player’s experience. This aligns with the interests of the advertiser, the game developer, and the player.

Admix already counts many of the world’s biggest brands among its customers, with more than 1,000 brands buying Admix stock every month.

A constant criticism of Web 3.0 is the lack of monetization in worlds like Decentraland and The Sandbox. However, Admix shows how important B2B service providers can generate revenue from Web 3.0.

Admix is ​​incredibly excited about the growth of Web 3.0, but is approaching it more like a real estate developer. The company has been buying land from Decentraland and The Sandbox since 2020 and renting that land to various brands that are current customers of its core “in-game advertising” business.

“The same concepts of proximity, how to create price and why to buy instead of rent, these are all the same questions you might ask of physical real estate.”

Sam Hooper, CEO of AdmiX

Experimenting with plots and renting them out at times to clients has resulted in monthly rents in excess of $60,000, with profit margins per development in excess of 70% (Fast Company). For example, in Decentraland, Admix developed a display of large-sized perfume bottles for L’Oréal and created temporary facilities for events such as New York Fashion Week.

It’s no surprise to us that much of Decentraland’s current activity takes place in the Vegas City neighborhood, which is a digital sin city.

We envision that providers like Admix will leverage their experience from previous spin-off projects and apply it to the growth of gaming and crypto betting, potentially attracting clients like Sportsbet.io as well as mature land brands like Caesars, Wynn and MGM.

It wouldn’t surprise us to see many of these companies on a billboard owned by Admix in Decentraland.

The dominant Web 2.0 companies are usually only 20 years old and have taken a few years to start generating significant revenue. Its extraordinary growth has led many of these companies to rank among the largest in the world by market capitalization.

They all have one simple characteristic in common: They provide a service that their customers need or value. For example, it has become almost impossible to run an e-commerce business without spending on Google Ads.

Flourishing realms like Decentraland and The Sandbox are, for the most part, letting landowners lead the way in monetization and we’re excited to see their continued development.

Company revenue (in millions of dollars) first full year First full year +2 The first full year +5 The first full year +10 The first full year +15 2021
Meta (established 2004) 9 153 777 12466 70697 117929
Google (established 1998) 0.22 70 3180 2,370 65670 257.637
Amazon (founded in 1994) 0.51 147.8 2760 8490 34204 469822
Twitter (established 2006) 0 4 106 2,530 5,077 5,077
Nvidia (established 1993) * 13.3 374.5 1,369 3,069 3,998 26914
* 1997 was taken as the first full year due to lack of private company data

Since its inception in August 2019, Waterhouse VC It generated a total return of 2,057% as of April 30, 2022, assuming all distributions were reinvested. Look at the long-term performance chart at the end of this newsletter.

Please note that the above information regarding Admix, DraftKings, Decentraland, The Sandbox, Sportsbet.io, Meta, Google, Amazon, Twitter, Nvidia, Caesars Entertainment and MGM Resorts is based on publicly available information about the company and should not be considered or construed As advice on financial products. Waterhouse VC has a spot on Flutter, Meta, and Google. The information herein is general information only and does not constitute investment or other advice. Readers should consult and rely on professional investment advice tailored to their personal circumstances.

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