The sports industry is worth somewhere up to $1 trillion a year globally, making it a significant market. From soccer to golf, sports are played and followed by billions of people. Not only has this caught the attention of cryptocurrency companies, sponsoring stadiums and sports teams, but it has led to innovative approaches from teams, players, and fans. Below, we look at the different ways crypto is changing and boosting the sports industry, as well as some likely future moves in this sphere.
Betting
One area that has seen significant growth is sports betting. Crypto-based betting sites offer punters the chance to place all of the usual bets and bet combinations, but rather than use traditional payment methods like credit cards and bank accounts, they can use Bitcoin or other cryptocurrencies. According to crypto expert Michael Graw, cryptocurrency betting sites offer faster payments, which can often be completed in a matter of seconds, as well as greater transparency and improved security.
Gamblers do need some knowledge of how the crypto market works. They need a wallet, and an account with an exchange, and they need to know how to send and receive payments. They also need to choose a legitimate betting site to ensure their details are safe.
However, users do not typically need to register any personal details and payments are pseudonymous, which means nobody can directly attribute a crypto wallet address to an individual. The privacy of crypto payments has seen these types of bets become popular with players in regions where sports betting is restricted or prohibited. But, the security and the speed of payments and withdrawals mean it is popular in other segments of the industry, too.
Team Sponsorship
You may never see a Bitcoin-sponsored team in any sport, but there are already well-established teams in football, soccer, baseball, and Formula 1 that have already accepted cryptocurrency sponsorship in some form.
The Philadelphia 76ers signed a sponsorship deal with crypto.com, which has been extremely active in sports sponsorship in general. The deal is believed to be worth around $10 million a year.
And, in 2022, The Dallas Cowboys became the first NFL team to sign a crypto sponsorship deal when they reached an agreement with blockchain.com. These two deals concentrate primarily on digital assets and enable the teams to sell Non-Fungible Tokens (NFTs), giving buyers the chance to own a piece of sports and cryptocurrency history.
Other notable sponsorship deals include Binance’s sponsorship of the Alpine F1 team, OKX’s deal with Manchester City, and Kraken with Tottenham Hotspur. In 2022, it was estimated that crypto firms had spent approximately $2 billion in sports advertising.
Unfortunately, at that time, a crash in the crypto market led to several previously successful crypto companies hitting financial trouble. FTX was a major casualty and it has signed deals with various teams including Miami Heat and the Mercedes Formula 1 team.
Other Sponsorship
Bitcoin is completely decentralized. There is no individual or group responsible for the governance or the marketing and advertising of the cryptocurrency, which is why you will never see a team donning a Bitcoin-sponsored jersey. However, this hasn’t stopped all such currencies.
In 2014, Dogecoin was making waves. It had the backing of a huge community on Reddit and Telegram, and while it would be some time before it got celebrity endorsements from the likes of Elon Musk and Snoop Dogg, that community is what helped the meme coin hit the mainstream. In 2014, the community grouped together and paid 67 million Dogecoins, or approximately $55,000, to sponsor Nascar driver Josh Wise. And that was after they had sponsored the Jamaican bobsleigh team to the tune of $25,000.
Beyond the sponsorship of teams and individuals, crypto companies have taken giant leaps in publicity by sponsoring some of the world’s biggest sporting events. This year’s FIFA World Cup was sponsored by crypto.com, which has also agreed to sponsor the UEFA Champions League from 2024 to 2027. And crypto.com is a company that clearly sees the value in sports sponsorship as it has also sponsored the Miami F1.
Fan Tokens
Another way that cryptocurrency companies are getting involved in sports is through the launch of fan tokens. Fan tokens are a form of cryptocurrency token that typically bears the name of the sports team they are associated with. The token is launched and sold by the team, and bought by its fans.
The team generates revenue, which can be used for any business purpose, and they offer some kind of bonus to the holder. Bonuses can include anything from ticket discounts to prizes. Some teams have even offered fan token holders the opportunity to vote on certain decisions taken by the club, while some lucky token holders even get to take part in meet and greets.
There are currently around 100 fan tokens. Paris Saint Germain, the French soccer team, is the most successful when valued by market capitalization. The $PSG token has a market cap of $27 million. Barcelona, Manchester City, and Galatasaray are some other big soccer fan tokens. And the tokens are becoming increasingly popular outside the massive soccer industry. The $OG token is a fan token from the OG Esports team while Alpine’s F1 team, Alfa Romeo Racing, and even the Davis Cup itself have their own fan tokens available for purchase.
Most recently, national soccer teams got in on the action launching their own tokens in the run-up to the FIFA World Cup with the Argentine Football Association Fan Token being the most noteworthy example.
Blockchain Ticketing
One area that is starting to see some crypto involvement, but has yet to fully develop, is ticketing. Ticketing major events raises a host of difficulties and problems, not least with fake tickets and the scalping of tickets at substantially higher prices than their original market value.
By putting tickets on the blockchain, all records regarding that ticket are made public which helps prevent ticket fraud. The issuer can track sales and transfers, while ticket holders can ensure they are buying genuine tickets by referring back to original records. It can also help teams prevent scalping and inflated resales, maintaining trust with their fans.
Blockchain is also extremely fast, with new entries completed in less than a second in some cases. This means that ticket buyers can access their tickets immediately without the slow wait associated with some purchases. This can be especially problematic for big games or major events. Thousands of people trying to buy tickets at once can bring down or cause major problems with centralized systems and websites, but the decentralized nature of blockchain ledgers means this isn’t an issue for blockchain sales.
Conclusion
Cryptocurrency is innovative and it has the potential to change a lot of industries. One industry that is starting to see the benefits of cryptocurrency is the sports industry. As well as offering a popular alternative to traditional betting sites, crypto fan tokens, sponsorship deals, and ticketing are already somewhat prevalent within the market. These deals are also putting cryptocurrency and blockchain in front of billions of invested sports fans, potentially helping to further expand crypto’s reach.
