Esports and cryptocurrencies are both popular among the younger crowd. Many young adults and teenagers follow competitive video gaming and watch matches through live streams.
Likewise, numerous young people have also purchased cryptocurrencies. The vast majority of this group has bought crypto for investment purposes. However, some of the same people also use cryptocurrencies as payment sources.
One of the most common ways that crypto is used is for online gambling.
Many see cryptocurrencies as easy ways to fund their accounts at online sportsbooks and other gambling hubs.
At first glance, it might seem like these digital currencies are simply helpful. But they’re also fueling underage esports betting.
I’m going to cover more on how the average person uses crypto in esports gambling. I’ll also discuss why cryptocurrencies are making it easier for gamblers to place bets.
How Cryptocurrencies Are Typically Used in Esports Betting
Bitcoin (BTC), the first crypto, was initially conceived by Satoshi Nakamoto as an answer to the 2008 Great Recession. This recession was largely caused by financial institutions overextending themselves through subprime mortgages.
Nakamoto (an alias) saw BTC as a way to cut banks out of the financial sector and allow for peer-to-peer transactions.
Over 10 years later, Bitcoin hasn’t quite accomplished Nakamoto’s goal of becoming a global currency. But BTC and other cryptocurrencies are seeing use in various sectors. In fact, esports betting is one of the most common areas where BTC is used. Many gamblers fund their accounts with crypto on a regular basis.
The first step to using cryptocurrencies for this purpose is finding a sports gambling site that takes them. Bitcoin is now accepted at a large number of betting sites, while Ethereum, Litecoin, and Bitcoin Cash are somewhat common.
The next step is to purchase an accepted cryptocurrency. Exchanges like Coinbase and Gemini allow you to buy Bitcoin, Ethereum, and other popular cryptocurrencies with fiat (e.g. USD).
You then need to visit the esports betting sites of your choice and obtain a wallet address. You’ll be sending the cryptocurrency to this address as a deposit.
Finally, you must go back to the exchange and send your crypto. At this point, you’ll be prompted to enter the recipient’s (casino’s) address.
As you can see, the process of making deposits with cryptocurrencies isn’t difficult.
But convenience isn’t the only reason why people are using these currencies at betting sites.
Some countries, like the US, have restrictive banking laws with regard to internet gambling. This is where crypto’s decentralized nature comes into play. Cryptocurrencies aren’t controlled by a central government or bank. Therefore, they can be used to get around restrictive laws and banking policies.
Underage Esports Gambling Is on the Rise
Switching to another subject, underage esports betting has increased greatly in recent years. The University of Bristol’s Department of Management has conducted a telling study on the subject.
Their research shows that 28% of UK-based tweets related to esports gambling come from people under the age of 16.
This percentage is five times higher than the number of minors who discuss regular sports betting.
The Bristol Department of Management’s research covered 888,000 tweets related to esports betting. They discovered that 74% of tweets from esports gambling companies don’t comply with UK advertising standards. This figure trumps the 68% of sports betting companies that also failed to meet advert guidelines.
The UK has strict rules on betting advertising. They dictate that all gambling-related ads be aimed at those aged 25 and older.
Professor Agnes Nairn, who authored the “Biddable Youth” study, discussed the results.
“We were really surprised at the number of children actively engaging with esports gambling accounts,” explained Nairn.
“Yet, with the massive growth in the esports industry. Unless action is taken, we can only expect this figure to rise as sports and gambling seem to be inextricably linked.”
He added that the online nature of these adverts creates more difficulty for parents who monitor their kids’ activities.
“Our in-depth analysis of the content of gambling advertising tweets leads us to believe that children’s esports gambling is currently under the radar in two ways,” Nairn said.
“It’s online where parents won’t see it and it’s using clever content marketing such as amusing GIFS, memes, pictures and funny stories, designed to appeal to and implicitly influence young people.”
How Does Crypto Enhance the Problem?
The University of Bristol research shows that esports betting could especially be subject to underage gambling. But where does crypto come into the matter?
Nairn’s team found that cryptocurrencies make it harder for parents to tell when their children are placing online wagers. Teens and kids no longer have to use traditional payment methods, such as credit cards and e-wallets, to bet online.
Cryptocurrencies, meanwhile, are almost untraceable.
A concentrated government effort is often needed to trace crypto transactions. In the case of Monero, transactions can be completely anonymous.
The study focuses on the advertising side of esports betting more than anything. However, it’s clear that crypto also plays a role in helping underage bettors get away with placing esports wagers.
Do Cryptocurrencies Bring Any Value to Esports Betting?
You can see that crypto presents some obvious concerns. It enhances an underage gambling problem that esports already deals with to a large extent.
But cryptocurrencies aren’t inherently evil with regard to wagering.
Certain groups of people like using these currencies over traditional payment methods.
As mentioned before, certain nations have harsh banking laws with regard to online betting. Some people in these countries may feel that they have the right to gamble online, especially if the activity itself isn’t outlawed.
Cryptocurrencies better connect these gamblers with esports wagering sites. Most are decentralized and not controlled by any one entity.
Another crowd that likes to use crypto includes those who don’t trust banks and the government. They like using decentralized currencies whenever possible due to this lack of trust. That said, they’re going to use crypto if they want to gamble on esports.
What Can Be Done About the Underage Gambling Problem?
Esports betting isn’t nearly as large as traditional sports wagering. However, it has grown tremendously within the past several years.
The esports wagering market as a whole is projected to reach $30 billion in 2020. This increase is sure to be accompanied by more gambling and underage betting.
Josh Smith, a senior research analyst at the Centre for the Analysis of Social Media, co-authored Biddable Youth, a report conducted by the University of Bristol. He believes that tech companies (e.g. Twitter) need to do a better job of keeping gambling ads away from underaged players.
“We hope this report serves as a call to action — both to technology companies to make it easier for gambling customers to get a clear picture of what they’re getting into,” said Smith. “And to regulators, who must continue to ensure that these new actors are compliant with regulation.”
The study proposes some specific solutions to curb the underage betting dilemma in esports.
Here are some of the key recommendations:
- Tech companies and gambling advertisers should work together to create better terms and conditions for adverts.
- Further research should be conducted on the exact type of social media ads that draw minors’ attention.
- Esports betting ads should feature clearer messages on age restrictions.
Esports lends itself more to underage wagering than traditional sports. They revolve around the video games that many young people play on a daily basis. Therefore, esports is more naturally inclined to harbor a problem with underage gambling.
But this dilemma is only exacerbated by the related advertisements and cryptocurrencies.
Regarding the ads, many of them are aimed at minors. The University of Bristol study showed that 28% of those responding to UK-geared Twitter ads were under 16 years old. What’s worse is that many of these same ads fail to meet UK guidelines. Such adverts are supposed to be aimed at adults over 25.
Cryptocurrencies make the problem worse by giving young teens and kids access to decentralized currencies. Parents can’t trace crypto transactions like they can with credit cards and e-wallets.
Instead, most of these decentralized currencies can be used without any monitoring from government or financial institutions.
Of course, these same kids need to initially buy crypto through some means. Parents can watch their credit card and bank statements for related transactions.
Luckily, advertising can be better controlled.
Regulators in the UK and other countries can spend more time monitoring such ads to make sure that a smaller percentage are reaching minors.
They can also force gambling companies to include clearer disclaimers on such adverts. Esports’ underage gambling problem could definitely be minimized if fewer ads reach younger people.