Beware online gambling sites bearing initial coin offerings
A new online social sportsbook is the latest to jump into the proprietary alt-coin pond, although it remains to be seen whether its customers will be the ones who end up taking a bath.
Forbes recently profiled Vancouver-based FansUnite, a social sports betting site that currently allows users to wager with free-play credits. However, the site has larger ambitions of taking real-money wagers starting next year via a proprietary digital currency it’s calling the FansUnite Token (FAN).
The company says it intends to hold a Token Generation Event – aka an initial coin offering – that will allow customers to acquire FAN. The company acknowledges that FAN’s real-world value will be “tied to the speculative value of the FansUnite Token itself on the open market as well as the utility and use of the FansUnite Token on the FansUnite platform.”
Customers in the US and Canada won’t be allowed to participate in the Token Generation Event, and FansUnite’s sportsbook platform will remain inaccessible inside the US. But FansUnite co-founder Duncan McIntyre told Forbes that his site’s “new and compelling value proposition” meant FansUnite was “perfectly situated” to capitalize on the imminent legalization of US sports betting.
Maybe, maybe not. For the moment, FansUnite’s business model is firmly locked in affiliate/tout mode. The company gets its betting lines directly from internationally licensed online sportsbook Pinnacle, and has ‘partner’ deals with Pinnacle, Bet365 and SportsInteraction should FansUnite punters wish to wager with real money.
FansUnite also relies on its ability to sell monthly subscriptions to ‘Pro Picks’, i.e. wagering choices made by FansUnite bettors who have shown “consistency and profitability” in their prognostications.
So far, so familiar. As for the FAN alt-coin plans, that’s also familiar, but in a more eyebrow-raising fashion. With the value of Bitcoin soaring, initial coin offerings are breeding like rabbits, yet the real-world value of these alt-coins remains suspect, as does the motives of some of the individuals announcing these ICOs.
Ask yourself one question: what value is a coin that you cannot spend anywhere except some theoretical future online sportsbook put up by guys with no experience in creating or running an online sportsbook?
If FansUnite was truly sincere in its desire to offer customers quick and simple money movement, all they need to do is incorporate a Bitcoin Cash (BCH) payment option, as an increasing number of existing, proven online sportsbooks have already done. Given the massive on-chain scaling capacity of BCH, which allows for speedy transaction processing with minimal transaction fees, what more do you need?