Steecky Thoughts #11: Steemit as a legal betting platform – a fun way to distribute SMD [6 min]
A blog by @ooak
It's a place for me to give birth to my thoughts. Meta thoughts about "Steemit", external thoughts about life and experiences. My aim is to bring value to people, entertain the audience and craft my writing skills all at the same time. I will write short to medium size blogs because I believe that today more than ever time is money and attention is hard to get.
Sport betting is a big billion dollars industry, although it is a highly regulated one. Some countries embrace is, some ban it entirely. The fact remains that it's part of the sports world and people like to bet as it contributes to their viewing experience.
I wrote before about what I think Steemit can become and what industries it can disrupt Here. I think that Steemit can become somewhat of a legal platform for betting.
In the past I researched the sports betting world. In my research I encountered the legal definition according to United States legislation "Unlawful Internet Gambling Enforcement Act of 2006". It states the in order for an act to be considered gambling or betting you must have three components: consideration, chance, and prize.
Consideration it the act of risking something of value.
The game has to have a chance component like the results of a game.
Lastly you will win a prize if won.
For example sports gambling if you put money (consideration) on a Basketball game (game's results can be considered as chance) and you win a prize at the end.
During the time I researched the topic I encountered a betting website that in considered legal. They give users a small amount of virtual money to gamble with. They then allow betting on sports event and once you reached a certain amount of money in your wallet you can withdraw it. They subsidized the site with lots of ads. Why was it legal? Well it toke the part of "Consideration" out of the equation, no one risked anything.
Steemit can serve as a legal platform for betting using SMD. It passes the test of consideration. users don't need to invest value to gamble on a chance game.
Let's imagine the process:
- A user who serves as a bookmaker opens a bet - who will win a basketball game: L.A Lakers vs N.Y Knicks.
- Other users who wants to take part has to do two things: up vote the post and comment with the result of who they think will win.
- Few minutes before the game starts the bet is closed. The bookmaker documents in the parent post the final participates in the bet and their results to avoid reply editing in a later date.
- Once the game is finished and after the post receives its SMD reward the bookmaker splits the reward between the users.
Pros:
- It can add to the experience of using Steemit. We have plenty of posts, blogs and boobs for ages. This is something different. A "game". A way to create a community around it.
- It's legal. No one needs to risk anything.
- A great way to distribute SMD for new users that wants to power up.
Cons and solutions :
- We must rely on the user (bookmaker) to transfer the funds.
Solution: A user that acts as a bookie can only "steal" once. After that no one will trust him. The incentive to do so is low. The long run is more profitable here. He profits the SP for every post. We can also you Steemit reputation system, the higher the reputation the more invested the user is the less risk in trusting him. We must also understand that no one loses anything. It's just up votes that is lost and the scammer loses reputation.
- There needs to be many up votes for a good amount of SMD to be rewarded and distributed.
Solution: There needs to be a use of a dedicated whale/dolphins to help give the post some funds. Distributing 0.01$ to 20 users is negligible. But 10$ or more can be better for minnows who wants to increate SP. So there needs to be a user with high SP that can help give higher rewards to the bet's pot. Also when time passes by more users with higher SP will rise and contribute more rewards.
- Open to Sybil attacks – people can open many users and bet two sides of the bet and win no matter what is the outcome.
Solution:
Sybil attacks can be resolved in two ways:
1- Prize distribution will be according to SP. We can sum all SP of users who placed a winning bet and they win SMD according to their percentage of the total SP of the winners. This kind of distribution can thwart someone from opening many users and can be the incentive to invest in only one user who has a high SP.
I thought about the above way of distributing the winning prize. It's good but needs some tweaking. My second idea is to cap the SP at a certain number let's say 1000. Why is that? Well if a whale with a 1M SP will bet and win, it will give him close to 100% of the funds. Nothing will be left for the minnows. But if we cap it at a 1000 SP the funds will disperses more evenly than before, allowing for minnows to enjoy some winning too.
Another thing that can help is to create parlay betting. Meaning a bet where you need to guess the outcome of two or more events. Given a lower statistics chance for people to win, so fewer winners but the winners will get a higher prize.
2- Using the reputation system built in Steemit to allow users to bet. It's hard to gain reputation. You gain in while investing time posting and creating content. Meaning you become more and more invested within the platform so the incentive to create a "Sybil attack" decreases. Also it allows us to distribute funds to minnows who want the success of Steemit for the long run and not users who just want to "dine and dash".
This is how I imagine Steemit can serve as a betting platform in parallel to blogging and meming. I will appreciate feedback and more ideas on the subject.
Shower Thought: Steemit will fail in "Wisdom of the crowds" because there is no financial incentive in this type of betting.
@ooak signing out…
Great idea! I love to bet on Sports it makes it funner to watch! I hope this does come to Steemit!
Upvoting for the idea, it's pretty unique to this market and has some potential. Not going to lie though, if I saw a 15 different game threads hit /new that said "vote here and split the money," I would think it would be a little spammy and probably not read.
If this were to work, I would think it would work more in the context of "play of the day," where commenters on the thread post their favorite play and people vote on which one they like the most. It would keep it to one message per day and would reward the top upvoted winning commenters for sharing their wisdom with the crowd. People start building reputations as they start making better picks. People would lose reputation of they attempted to edit their comments(easy to tell on the blockchain).
1- It's not meant to spam the front page. although once new features where you can filter or subscribe to different tags will be implemented it will not be a problem.
2- It should have like I wrote a dedicated whale or dolphin user to up vote and put some money in the pot. so no begging for up vote needed.
3- there is no way to limit those kind of posts under the betting tag for example but once one bookmaker will show good reputation of payments it can be limited to few bets a day not dozens.
and I don't follow your "play of the day" idea. you mean predictions ? if so it cab be parallel to the bets opened.
Yes, I was referring to the prediction aspect with play of the day. r/sportsbook has something similar. A lot of users have developed high reputations for handicapping games by posting their "play of the day" in a dedicated thread. People "tail" the high upvote high reputation folks and maybe make money for betting with them (off site, of course). Upvotes mean prestige there, but mean so much more than that here.
I was thinking of your idea in terms of limitations of what we have now, which is why I was thinking in terms of consolidating predictions to one thread. If subscribing to tags was implemented, I agree that would be better and work well for your proposal.
Because it's an open platform we can't limit the number of posts and spams. but in the end we won't see thousands of bookies but a select few.