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It is 20 years since the gambling industry was shaken up by the advent of peer-to-peer (P2P) betting exchanges, but the next wave of innovation may finally be about to break.
Edinburgh-based BetDEX announced today it had secured the largest ever seed funding round for a UK start-up ($21m), as it aims to become the world’s first decentralised sports betting protocol, with a launch date of the first half of 2022.
The company is chaired by Nigel Eccles, who co-founded the fantasy sports operator FanDuel in 2009, and its team includes veterans of Flutter.com, the original P2P sports betting exchange. That merged with Betfair in 2001, which merged with bookmaker Paddy Power five years ago, which acquired FanDuel in 2018 and then renamed the group Flutter Entertainment in 2019 to complete the circle.
Betting exchanges allow punters to become bookmakers, offering their own odds on outcomes, as well as taking the odds offered by fellow players for a horse, team or individual to win or lose. Betfair charges a 2 to 5 per cent commission on winnings, but BetDEX says it will be able to reduce commission on exchanges it enables to less than 1 per cent, using blockchain technology.
While the company is planning its own exchange, its platform will enable others to do the same. “Because BetDEX is a permissionless protocol, it means other entrepreneurs can build their own betting applications on it, ” Eccles told me. “That could be a simple sportsbook focused on ping-pong or a full betting exchange for football.”
So this adaptation of decentralised finance (DeFI), built on the public blockchain Solana, opens up the possibilities of many new businesses and products catering to fresh niches and audiences, although their success will depend on popularity creating sufficient liquidity.
The investment round is led by the San Francisco crypto VC firm Paradigm and Bahamas-based cryptocurrency exchange FTX. We revealed on Monday that Paradigm has just raised the biggest ever crypto VC fund, amounting to $2.5bn. Investment partner Arjun Balaji said today: “It feels obvious crypto will transform online sports betting. DeFi has shown how financial markets can be automated and distributed to the benefit of consumers. Crypto can do the same for all other kinds of financial activities, including betting.”
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Apple will allow customers to repair their own devices in a move that could bring down the cost of fixing iPhones and Macs and extend the lifecycle of consumer electronics. In a boost for the Right to Repair movement, Apple on Wednesday launched a self-service repair programme that would allow customers to purchase Apple-made components to replace worn out or broken parts.
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