The fantasy sports platform, FanDuel, announced a unique tournament called “The Bitcoin Cup” on January 2, 2018. The promotion page for the competition explains that the event will last the duration of the NFL playoffs and FanDuel will aware winners bitcoin instead of fiat.
The cryptocurrency-based tournament will consist of two contests in total, only one of which is a paid-entry game at $3 per entry. The free event allows just one entry per person and is named “Bitcoin Bowl Free Play.”
The single winner of the free event will be awarded one bitcoin, valued at around $16,000 at the time of writing this article. The paid-entry game has multiple prizes, with the winner taking home two bitcoin, second prize getting half a bitcoin and the third and the fourth places being awarded one-quarter of a bitcoin.
The value of bitcoin may fluctuate until entries are confirmed January 6, 2018, so any volatility in the price of bitcoin is at the risk of the winner. The bitcoin awarded at the end of the tournament could thus potentially be worth a few thousand dollars more or less by the time a winner is determined.
This attempt is not the first time that sports-related websites have adopted and offered payments in cryptocurrencies. Bitcoin has also been accepted as a payment method at fantasy sports websites for quite a while now, but the adoption rates are higher for gambling and betting related platforms.
Digital currencies are particularly useful as they allow people living in regions where sports gambling is illegal to participate freely. The increased usage of cryptocurrencies in gambling and other activities, however, may lead to the formation and prosperity of large-scale money laundering rackets and tax-evading operations.
SportsBet.io, for instance, is a popular sports betting service that exclusively uses cryptocurrencies for transactions across its website. The company states that it is “licensed to conduct online gaming operations by the government of Curaçao,” which happens to be a remote Caribbean island, far from international gambling and money laundering laws.
FanDuel’s experiment with bitcoin prizes instead of cash equivalents is a move designed to test the interest of its user-base in cryptocurrencies. The CEO of FanDuel confirmed this in a recent statement: “In awarding Bitcoin, we’re recognizing that most of our users are early adopters of technology and have a significant interest in cryptocurrency.”