Oct 2018 version


The game of poker has been a staple of casinos, cardrooms, and home games for over 100 years, but its popularity truly exploded in the mid-2000s with the advent of two major innovations: the holecard camera turned poker into a televised sport, and Internet poker made it possible for anyone in the world to find someone to play with at any time.

However, the popularity of poker has plateaued over the past half decade. Regulatory fatigue, a history of bad actors, and conflicting incentives between platforms, pros, and recreational players have resulted in a hostile online poker environment for fans of the game.

Meanwhile, two related industries have begun to lay the groundwork for a new boom in online poker: blockchain technology and eSports. OddSlingers brings these new industries together to breathe fresh life into the game of poker.

In this paper we propose an innovative business model which strikes at the intersection of two massive growth industries (eSports and Blockchain) and provides an elegant solution to several long-standing problems in a multi-billion dollar industry.

Our business model is based around live-streaming professional players: recreational players engage with pros by watching them livestream their games, and taking a cut of their wins and losses at a market rate. A fee will be taken from these derivatives, and part of that fee will go paid to the pro player, creating an incentive for pros to provide entertainment value to recreational fans, and to play an honest game. This will all be done on-chain and in real-time, with a publicly verifiable audit trail which will eliminate the need for blind trust in the platform provider.


ActionThe sum of all of a players' wagers in a game of poker.
Buy-and-burnThe process of buying an asset and then immediately destroying it, thus lowering the supply and increasing price.
CrossbookingBuying a percentage of another player's action. E.g. crossbooking 10% means that player losing $100 means you lose $10, and vice versa.
ERC20 TokenAn Ethereum-based standard for blockchain tokens which facilitates exchanging tokens for one another.
eSportsCompetitive spectator games that are played and broadcast online.
FishTongue-in-cheek term for beginner or amateur in the gambling world
OTOddSlingers Token, the unit of ownership, governance, and wagering on the OddSlingers platform
RakePercentage of a pot taken as a fee
Real-Time Market MakingThe practice of offering positions with payout ratios that change frequently to represent changing real-world conditions. For example, offering bets on the outcome of a game that is in progress.
SidebettingThe practice of taking derivative positions on outcomes of gaming events. A common example of a sidebet is whether the next card dealt in a hand of poker will be red or black.
SharkA fearsome competitor in the gambling world
ShotgunReal-time crossbooking product offered by OddSlingers
StablecoinA token that is price-stabilized with respect to a widely-used asset class, such as fiat currency. The stabilized price makes it suitable for medium- and long-term use as a unit of account and exchange.
Staking Form OTAn OddSlingers Token that earns voting rights and increased profit-share at a temporary liquidity cost.
Wagering Form OTAn OddSlingers in its default form, used to place wagers on the OddSlingers platform

Market size and Growth potential

It is estimated that the online poker industry generates $2.5 billion in revenue per year, and this figure ignores free-to-play or freemium platforms such as Zynga Poker, which likely raise this figure to $4 billion in yearly revenue from an estimated player pool of 80 million individuals worldwide (for about $50/player/year). However, OddSlingers' business model differs from traditional online poker rooms in that it monetizes spectators in addition to players, for a much higher revenue ceiling.

The size of the eSports audience is already estimated to be 400 million globally, and has been growing exponentially for years with no sign of stopping. However, eSports have yet to reach their monetization potential. The younger generation doesn't have patience for the volume of ads seen in typical American sports broadcasting, and so most eSports profits are funneled into the games themselves, typically in the form of freemium business models. The result is that that the average eSports fan produces only about $3.60 USD of revenue per year, as opposed to $15 USD per NBA fan.

Moreover, revenues from sports media rights, sponsorship, and consumer revenues put together make up only a fraction of revenues from sports betting. The NFL, for example, is estimated to have generated about $13 billion USD in revenue last year, as opposed to NFL sports betting generating around $50 billion USD. Note that this rate of monetization is closer to that of online poker.

With a much larger potential audience than online poker, and a higher rate of monetization than traditional eSports, OddSlingers uniquely combines the spectator model with gambling-based monetization, for billions in potential annual revenue.

(this plot is interactive--drag the circles to adjust assumptions about the size of and monetization rate)

Progress and Traction

We launched a beta play-money poker site at the beginning of 2018. Our site is web-only, and compatible with any device, offering an advantage over most platforms which require app installation and are at the mercy of vendors like Apple, which banned all poker-related apps two months ago.

In July of 2018 we began a modest advertising campaign, and over the following three months our userbase has increased fivefold to over 1000 users. The CPA is very encouraging: so far we're seeing a CPA of $2.90 per new user, which would be profitable even at the most meager of monetization strategies. Our retention is also very good, with repeat users increasing sixfold over the past three months, and 10% of our users returned to play thirty or more times.

For context, typical gambling affiliates charge in the range of $20-$300 per user, and/or involve significant revenue share. This is because active gambling users are incredibly valuable: Pokerstars, the largest player in the poker space, made 1.3 billion in revenue with about 16 million users, coming out to $81 per user per year in revenue.

Achieving a sustainable volume of traffic will be our top priority in the short term. While Pokerstars' traffic peaks at about 15,000 active cash users daily, we likely only need our peak daily traffic in the hundreds to build a sustainable business: Pokerstars NJ, which by law has a userbase separated from the rest of the world, is profitable with peak daily users in the mid-200s.

We intend to have a sustainably-large play-money userbase by the time we launch for real money in 2020, so that we can funnel that traffic into our real-money games and crossbooking products. If our user acquisition costs remain anywhere near the current rate, we'll scale from the handful of peak daily actives we currently have to hundreds in only a few months on a reasonable marketing budget.

Regulatory Landscape

OddSlingers is fully committed to complying with international online gambling regulations. These regulations can be complicated, and vary depending on the geographic location of a given user. Regulatory jurisdictions generally fall into one of three categories for OddSlingers' purposes:

Jurisdictions to avoid include the United States, France, Italy, and Spain. These are jurisdictions in which online gambling is regulated such that the barriers to entry are insurmountable, or outright illegal.

Jurisdictions which we may enter in the future include jurisdictions in which obtaining a license is difficult, and jurisdictions in which the legal climate is currently risky or unclear.

Jurisdictions with low barriers to entry include the majority of states worldwide in which online gambling is legal, regulated but with accessible licensing, or unregulated. In the former group of countries, a multi-jurisdictional license is typically acquired. The Isle of Man, Malta, and Alderney are examples of states which act as reputable multi-jurisdictional online gambling regulatory bodies. OddSlingers will obtain such a license before operating real-money games in Q3 2018.

Current Problems in Online Poker

Misaligned Incentives

Most of the money in a poker economy enters via recreational players' deposits, and it exits the economy via rake (the house) or withdrawals (a lucky recreational player, or a winning pro).

We can assume that, at a given table, some players are better than others. That is, each player has some expected rate of return on their bets. Some are negative, some are positive, and the sum of all those rates of return is negative, because a percentage of every bet is kept by the house in the form of rake.

In aggregate, it is in the best interest of both the house and pros for the games to be enjoyable and fun for recreational players. This means that the expected rate of return on their bets should not be too discouragingly negative: they should expect a fair amount of play for each dollar deposited. Furthermore, it should be possible for a recreational player to outplay other players.

Unfortunately, there is a tragedy of the commons at play for professionals: while it is in the best interest of all to keep the games fun and playable, it is in the best interest of any individual pro to win as much as possible as quickly as possible. To this end, most modern professional players use sophisticated analytical tools to scout out recreational players and crush them as efficiently as possible.

Today's online poker games are rife with predatory professional players who have spent years studying every facet of the game such that new players stand no chance. This also means that games at the highest levels typically do not run without the presence of at least one perceived "fish"; an unfortunate result for fans of the game.

Online poker needs a business model that better aligns players' incentives.

History of broken trust

Online poker has been riddled with scandals, none larger than the revelations in the wake of Black Friday in 2011, in which the US Department of Justice seized the funds of the three largest online poker rooms only to discover that two were insolvent.

As a result, the public distrusts online poker rooms. Surveys have shown that two-thirds of Americans do not trust any agency to provide fair and secure online poker.

Online poker needs a transparent, secure system that players can trust.

OddSlingers Crossbooking: A Novel Solution

The OddSlingers business model more closely resembles that of twitch.tv than a traditional online poker room. Online Poker is offered like in any other cardroom, but with the addition that players may stream video of themselves as they play, with an emphasis on featured (high-stakes) games for spectators. In addition to watching pros' streams, spectators can also take a cut of a player's action, at a market rate.

Let's look at an example:

  1. Bob the spectator logs in to see Alice Poker, his favorite poker personality, playing with $1000 at a cash table.
  2. Bob wants to get in on Alice's action, and looks to buy 1% of her action.
  3. At even odds, this would cost $10, but Alice is a known winner, and so her action is in high demand. Instead it costs $12.
  4. Bob has money on the blockchain, and is able to place his bet instantly and transparently using smart contracts.
  5. Part of that $12 is a $1 fee, which is split between Alice and the house.
  6. Whenever Alice wins a pot, Bob wins 1% of that amount. If Alice loses her buy-in, Bob loses his investment.

This business model offers key improvements over the traditional rake-based model:

A virtuous cycle of incentives is created. In this model, Alice is incentivized to be entertaining, and bring spectators to her games. The more spectators come and place bets on her, the more money she will make in betting fees.

This also disincentivizes misbehavior, such as cheating or colluding. When a significant part of Alice's earnings come from her popularity as an entertainer, she has a lot more to lose from a scandal.

Finally, OddSlingers now has a new incentive to provide fun, engaging, high skill-cap games. This business model that truly aligns with the social value add of poker: entertainment.

The entire system is transparent. All players funds are held in a publicly auditable blockchain. Any player can confirm that his or her funds are secured by simply following the trail of transactions on the blockchain, thus eliminating the possibility of his funds being embezzled by the organization such as what happened with Full Tilt or the Cereus Network.

Furthermore, a focus on audience increases the scrutiny placed on each game, so that it becomes harder for bad actors to go unnoticed. Every one of the major scandals in online poker's history were uncovered by discerning players: by increasing the ratio of observers to players, the games become inherently safer.

Future Expansion

While the OddSlingers business model is designed specifically to solve problems in online poker, there is no reason it should be limited to one game, nor games in general. In the long term, OddSlingers plans to apply the lessons it learns in building a real-time betting engine to building real-time eSports betting in general, and then prediction markets more generally.


Present Q1 2019 2019