Ex-FanDuel Execs Bet Crypto Can Disrupt Sports Gambling

BetDEX, which says it’s the first decentralized sports betting protocol, is looking to double down on disrupting the legacy gambling industry, which the startup reckons is in desperate need of lower fees and better user experience.

Live on Solana’s developer testnet, the Monaco Protocol is set to function as a global clearinghouse for sports betting via a digital assets-based liquidity pool.

BetDEX, one of several key contributors to the protocol, is the first sports betting application built on top of it, the company said Wednesday. Hundreds have been lining up wagers on soccer as part of beta testing and more than 80,000 are on the waiting list, according to BetDEX.

Traditional sports betting, which BetDEX says was worth $250 billion in 2021, is plagued by poor user experience and high fees ranging from from 5% to 40%, CEO Varun Sudhakar told Blockworks. BetDEX fees will be no more than 1%, he added, declining to detail specifics. 

Other problems include counterparty risk and corresponding withdrawal issues, such as delays in cashing out.

“We’re never going to be in control of any customer funds,” Sudhakar said. “Someone could come in through our exchange and place a wager. That wager’s going to sit on a smart contract and automatically get disbursed immediately upon settlement to the winner.”

While sports gambling on the blockchain is nothing new, the exchange is vying to gain licenses in various jurisdictions in coming months — Sudhakar declined to specify which — as well to actually go live on the Solana mainnet. In 2023, the Scotland-based company will look to add additional locales and sports. 

BetDEX secured a $21 million seed round in November 2021, led by crypto investment firm Paradigm and exchange FTX.

FTX CEO Sam Bankman-Fried said at the time “it is mind-boggling that more sports wagering does not occur on exchanges.”

BetDEX was founded by one-time execs at FanDuel, an online sports gambling firm, including former CEO Nigel Eccles, BetDEX’s chairman. Sudhakar spent three years at FanDuel.

Principal software engineer Eoin Murphy was previously head of sportsbook technology at FanDuel. Other recent senior hires include product director Aidan Maughan and legal director Kevin Kreuser, who joined BetDEX from BoyleSports and Twilio, respectively. 

Drawing a parallel between gambling and the airline industry, Sudhakar said there’s an abundance of players hawking the same core products at generally high prices — a confluence of factors the startup views as primed for disruption via digital assets. 

“The key opportunity for sports betting from my perspective is a global clearinghouse to arise for sports betting that can drive fee compression across all of these different front-end operators across the world,” Sudhakar said.

“This would really force them to compete upon product and user experience and not compete upon who can necessarily raise the most venture capital money and acquire the most customers.”

Get the day’s top crypto news and insights delivered to your inbox every evening. Subscribe to Blockworks’ free newsletter now.