Discussing AI, Blockchain And Decentralized Sport Betting With Sport.Trade CEO Saurabh Maloo

The world of sport betting has long been dominated by traditional bookmakers, offering a familiar yet centralized experience.

However, the winds of change are blowing, fueled by the revolutionary potentials of blockchain technology and artificial intelligence(AI).

These emerging forces are poised to reshape the sports betting landscape, pushing the industry towards a more transparent, secure, and potentially more exciting future.

In this interview, Sport.Trade CEO Saurabh Maloo, delves into how traditional sports  betting is adapting to the AI and blockchain revolution, exploring the opportunities and challenges that lie ahead as this transformative technology takes hold.

Can you briefly tell us about yourself?

I'm Saurabh Maloo, the CEO, with a deep passion for everything from sports, fitness to travel. Anindya Kar, our COO, is not only a top graduate but also a serial entrepreneur with a love of delving into sports stats.

Amit Raina, our CTO, merges financial expertise with a strong tech background, he leads the protocol design and development.

We three founders are all gold medalists and top rankers from India’s Ivy League, IIT and IIM, bringing together over 50 years of combined experience in quantitative trading, risk management and entrepreneurship.

We've worked with top multinationals and have been instrumental in scaling startups. Together, we leverage our diverse skills to drive innovation and excellence in our ventures.

What are the factors that are driving the growth of the sports betting market?

The sports betting market is booming and is currently valued close to $100 billion. It’s expected to cross $200 billion before 2030.

Around 20% of the world's population is involved in gambling, and sports betting dominates the scene, holding over 40% of the online gambling market.

That's much higher than casinos or lotteries, largely because it combines the thrill of winning with the passion fans feel for sports. Several key trends are driving this growth.

More regions are legalizing and regulating sports betting, opening up new markets. Mobile technology lets people place bets from anywhere, boosting participation. Enhanced global sports popularity and media coverage have made live betting extremely popular.

Plus, innovations like AI and blockchain are making betting safer and more engaging. And as cultural attitudes shift, betting is becoming a mainstream form of entertainment, fueling even more growth.

What are the challenges facing the traditional sports  betting industry?

The traditional sports betting industry is facing a host of challenges, largely due to a landscape dominated by a few centralized platforms.

These platforms create high entry barriers, making it tough for smaller players to compete and for new entrants to break into the market.

For bookmakers, the challenges are significant. They need substantial capital to get started and must manage revenue volatility.

Access to competitive odds and strong risk management skills are crucial, along with handling the complexities of user KYC (Know Your Customer) procedures. For users, the problems are equally daunting.

There's a pervasive lack of trust and transparency, with issues like denied payments, unfair odds, and poor liquidity, which diminish the betting experience.

These challenges highlight the need for more innovative and inclusive approaches in the sports betting industry to ensure fairness and improve accessibility for all players.

Can you explain decentralization as a key component in decentralized sports betting ?

Decentralization is a game changer in sports betting. It spreads control from a single central authority to multiple participants, enhancing transparency and security.

Through blockchain technology, every transaction and operation is recorded openly, making everything auditable and fair.

Smart contracts automate and secure payouts based on verified outcomes, reducing the risk of manipulation. This not only makes betting fairer but also lowers entry barriers for new operators, thanks to reduced operational costs.

Plus, it empowers users by involving them in key decisions through governance tokens. While it introduces challenges like technical complexity and regulatory uncertainty, the benefits of decentralization—like increased trust and user empowerment—make it a powerful approach in modernizing sports betting.

Why is the mass adoption of web3 betting slow?

The mass adoption of web3 prediction markets has been slow for a few key reasons. Firstly, the user experience is not straightforward, especially for traditional bettors.

The process of connecting to wallets like MetaMask and managing things like 16-phase keys can be overly complex, and it’s cumbersome to switch devices.

Moreover, the web3 betting landscape is predominantly peer-to-peer, leading to limited liquidity and poorer odds.

Many desired betting options like spot bets and live betting during games are not available in web3 platforms.

This is a significant gap because 80% of traditional betting is done on spot-bets, which are totally missing from web3 environments.

We strongly believe that these challenges need to go away. We introduced features like account abstraction wallets that allow users to log in via email, eliminating the need to manage a MetaMask wallet directly—making the transition seamless for traditional bettors. We also address issues with speed and transaction flow.

By leveraging AI-powered bet creation and encouraging community participation in creating bespoke bets, we created a wider variety of betting options.

Our system ensures transparent and fair odds, and allows users to place bets live during games and place orders like Take Profit or Stop Loss for optimal bet management.

You co-founded Sport.Trade in 2024. What can you tell us about its founding?

The idea for Sports.Trade originated from our earlier venture, Sportiqo, which we co-founded to blend our passion for sports with decades of expertise in trading and risk management.

With Sportiqo, we introduced a novel concept—linear trading of athletes, akin to stock trading based on a player's performance on the field.

This platform has grown significantly and operates profitably in India, boasting over 200,000 users and monthly transaction volumes up to $50 million.

While scaling Sportiqo, we confronted numerous challenges common in the traditional sports betting industry.

Recognizing these could be effectively addressed using AI and blockchain technology, we founded Sport.Trade with the aim of  resolving pervasive issues for a vast consumer base—about 8% of the global population engages in sports betting.

Sport.Trade leverages cutting-edge technology to ensure fairness, transparency, and trust, transforming an industry where demand is strong despite past unfair practices.

How competitive is the sport betting landscape?

The sports betting landscape is incredibly competitive, with both established centralized platforms and emerging decentralized solutions vying for market share. To illustrate this, let’s compare running a bookmaker business to operating a bar.

Today, if you're operating a bar, your customers have various places to go, and they receive a similar product at each place. How a bar differentiates itself is through exceptional service and providing a great experience that keeps customers coming back.

Therefore, it's in the bar owner's best interest to focus solely on delivering top-notch service and ensuring customer satisfaction. Infrastructure issues like plumbing, refrigeration, air conditioning, acoustics, and electrical systems shouldn't be the owner's primary concern. This scenario is very similar to operating as a bookmaker.

A bettor has many platforms where they can place bets, and bookmakers should focus their energy on user acquisition, engagement, and retention by offering a gamified experience and impeccable service.

However, bookmakers often get bogged down with infrastructure issues such as: managing revenue volatility, risk management, capital reserve requirements, offering fair odds, payments and settlements, chargebacks, risk offloading, and offering a variety of spot bets.

I personally believe that we can overcome these problems by offering an infrastructure layer solution and allowing bookmakers to focus on growing their user base.

By solving these challenges, you significantly enhance the revenue potential for bookmakers while giving them the bandwidth to focus on user acquisition and retention. We believe this approach positions us uniquely in the competitive sports betting landscape.

How do you leverage AI as a decentralized sports betting platform?

We harness the power of AI to build an innovative decentralized sports betting platform. Our AI continuously analyzes betting trends and market dynamics to maintain a balanced book, optimizing revenue while minimizing volatility through dynamic risk management.

By leveraging real-time data, our algorithms ensure competitive and fair odds for both bettors and bookmakers.

Additionally,by analyzing user behavior and pattern, AI-powered bots create custom bets like parlays, spot bets, and exotic outcomes, allowing for a diverse range of betting options, and it also provides personalized recommendations that enhance user engagement and retention.

Furthermore, our AI monitors betting patterns to detect and prevent fraud, ensuring a safe and fair environment.

In summary, AI forms the backbone of our platform, delivering dynamic risk management, competitive odds, variety of bets, advanced order features, fraud detection, and personalized user experiences to set new industry standards in decentralized sports betting.

Any parting words?

Bookmakers should focus on their core competence: prioritize user acquisition and enhance user experience instead of getting bogged down by infrastructure challenges.

We are trained to handle the complexities of risk management, liquidity, and odds. Focus your energy on delivering a seamless and gamified betting experience that keeps your users engaged and loyal, enabling you to scale up faster.

As for Web3 betting startups, they have lost the plot by failing to onboard traditional bettors, leading to a significant gap between Web3-friendly users and conventional sports bettors.

We bridge this gap by facilitating an easy, transparent, and user-friendly platform that brings the benefits of decentralized technology to all bettors without any complexities.

Furthermore, this ecosystem benefits all stakeholders by making the entire process transparent and ensuring fairness for users in a world that has traditionally been opaque and heavily biased against bettors.

Ultimately, bookmakers should capitalize on the opportunities presented by decentralized platforms, where they can rely on a robust infrastructure and innovative features, allowing them to focus on what truly matters: delighting their users.