Among the many options for punters the world over is eSports. For the purposes of this article, eSports are not confined to computer simulations of typical sporting events like football matches and pro basketball. They are competitive video games played by both individuals and teams, games like 'Counter-Strike' and 'League of Legends'.
There are entire professional leagues of gamers who make a living competing in such games. And yes, eSports fans bet on the outcomes. Not only that, a recent article published by the Calvin Ayre website cites data suggesting that bettors putting money on eSports tend to take more risks when they are betting Bitcoin (BTC) or Ethereum (ETH).
Why is that? Why would cryptocurrency bettors be willing to take more risks than their fiat counterparts on the exact same games? No one can say for sure but figuring it out would be an interesting anthropological study for sure. Much of it may be due to the types of people who would deposit BTC and ETH to begin with. Perhaps they are, by nature, less averse to risk.
Betting by the numbers
The data in question comes from LOOT.BET, an online gambling site that specializes exclusively in eSports. Their data shows that roughly 15% of their annual turnover comes from BTC and ETH users. Now, here is where it gets interesting. BTC users on average, bet 100% more than their counterparts using fiat.
For example, a fiat user might wager $100 on a particular game. A comparable BTC user would bet $200 on that game. ETH users are likely to bet only about 50% more than fiat uses - or $150 for that particular game.
It is also interesting to note that cryptocurrency users prefer certain games over others. 'Counter-Strike: Global Offensive' seems to be the most popular, earning up to 55% of the total cryptocurrency bets. 'Dota2' gets about 35% of the action while 'League of Legends' takes 5%. The remaining 5% is spread out across all the other offerings on the LOOT.BET site.
Players with the younger mindset
One possible explanation for the larger BTC and ETH bets is found in the types of players that actually use cryptocurrency. Calvin Ayre's Paul Seaton speculates, along with counterparts at LOOT.BET, that the gamblers most likely to frequent the site are younger people who are into video games just as much as online betting. These are people who grew up with game consoles in their homes and neighborhood friends who all came over to play.
As young people, their mindset is toward technology and innovation. They are not afraid to try new things. We already know that this type of mindset attracts people to cryptocurrency just because it is new and different. We also know that young people are more willing to accept things like BTC and ETH as replacements for fiat.
That being said, young people are also less averse to risk overall. They have a tendency to think that they are invincible. They tend to believe that the benefits of taking risks far outweigh the risks themselves. So it makes sense that they would have no trouble betting on eSports. But what is it about BTC and ETH that attracts so much risk?
The answer may not be in the risk itself. It might be in the popularity of the two cryptocurrencies. Just look at the numbers and it is evidently clear that BTC and ETH are the two most popular cryptos with investors and casual users alike.
Investing in cryptocurrency
Young people are as a savvy about cryptocurrency as their older counterparts are about stocks and shares. They understand cryptocurrency as an investment in addition to a payment system. So it is reasonable to believe that the vast majority of BTC and ETH gamblers don't purchase coin simply for the sake of spending it. They purchase it as both an investment and a monetary system.
It is also important to understand that investing in cryptocurrency is a bit of a gamble itself. That is true of any type of investment, but cryptocurrency stands out in particular due to its price volatility. Imagine you are young person putting money into BTC for the first time. You see the highs and lows on a daily basis.
As a young person with plenty of optimism and not a lot of personal history to rely on, you are not phased so much by volatility. Your investment is a gamble you are willing to take because you know the payoff could be huge. Now let us translate that into eSports betting. To make it more interesting, let's assume you have decided to spend some of the recent profits you earned after a BTC spike.
You are already in a good mood thanks to BTC commanding a higher price. You have some nice profits to play with. What will you do? You will take some of those profits and place some bets on eSports. If you are like most people, you think of your profits as free money. After all, you didn't earn it. It is only the result of market increases. And because it is free money, you are more willing to lose it on a bet. Do you see where this is going?
You visit your betting site, find your favorite game, make your deposit, and place your bet. You are not even thinking about the amount you are actually wagering because you have already decided to bet the whole chunk anyway. Meanwhile, other users playing with fiat are more cautious about the amount they spend.
Not real money
If the investment scenario among younger gamblers does not explain the phenomenon, there may be something else in play. It could be that younger people are willing to take more risks with BTC and ETH because they do not consider it real money.
It is hard for an older person to make that kind of disconnect. After all, you spend fiat to buy cryptocurrency. The only other way to get into the crypto market is through mining or running a business that accepts crypto payments. For most of us though, entry is through direct financial investment. As such, most of us view cryptocurrency as a representation of fiat spent.
If that is not your mindset, then cryptocurrency may represent something other than money. Maybe it is just digital tokens you get to play with. If you don't see it as real money, perhaps you're less likely to be careful about how much you bet.
There would be a fairly easy way to test this theory. All you would need to do is set up a scientific study that compares different types of betting. You might want to study a person's betting habits when using physical bills and coins, credit and debit cards, physical poker chips purchased with fiat, and cryptocurrency deposits.
It would be curious to know, for example, if betting habits were different when comparing physical bills and coins against physical poker chips. Are gamblers willing to take more risks when they are playing with poker chips? If so, that could be an indicator that they do not view poker chips as a representation of real money. Those same gamblers playing more cautiously with bills and coins would be further evidence in support of the theory.
Cryptocurrency and casino gaming
For the purposes of this discussion, we have two working theories as to why eSports bettors depositing BTC and ETH take more risks. The first theory is that the same young people more likely to embrace cryptocurrency are also more likely to take bigger risks in every area of life. They understand that cryptocurrency is risk in and of itself. They have no trouble carrying that risk into their gambling.
The other theory suggests that currency gamblers may not view their tokens as real money, thereby leading them to be less cautious. If this second theory were true, we should see the same sort of thing in online casino gambling. People who deposit BTC and ETH at a traditional casino would deposit larger amounts and make larger bets.
On the other hand, the other theory would not apply to casino gambling to the same degree for the simple fact that things like slot machines and table games are more old school. We would not expect as many younger players to gamble on casino games when given the choice between them and eSports. Thus, the first theory being the most likely explanation would demonstrate just the opposite reaction at a traditional online.
All of this is speculation, of course. No one really knows why younger people on eSports betting sites take more risks with cryptocurrency. The fact is they do. The numbers do not lie. For site owners, the lesson here is clear: embracing cryptocurrency is a no-brainer if you are taking bets on eSports.
LOOT.BET has invested heavily in their cryptocurrency technologies. They have gradually expanded the coins they accept along with improving infrastructure to facilitate instant deposits and extremely quick withdrawals. They see the potential of the cryptocurrency audience and are bound and determined to use it to their advantage.
Their customers do not mind at all. In fact, they seem to reward the site every time its owners do something else to make cryptocurrency bets more attractive. That is the way it should be.