I'd say they're neither: they're marketing. The average gambler isn't that bothered about the actuarial unfairness of their bookmaker or casino, and the bookmakers don't make fortunes because their cut is particularly large but because they are very good at hooking people on making more bets, and having enough volume to lay a big bet.

The one area where blockchain based gambling might offer a significant theoretical advance is games when all the gambling is contained within auditable code that's provably actuarially fair, but people generally don't get interested in slot machines because the ability to audit expected return is important to them (if they do, it's probably because they have a strong impulse to disregard that understanding and/or are gambling sums they don't care about...).

When it comes to bets on the outside world, crypto-gambling is arguably a lot worse than a high street bookmaker as it involves a de facto side bet on (i) the value of the crypto asset not declining during the bet duration and (ii) the oracle being reliable. It's not like you can't get odds or participate in more obscure bets or prediction markets using regular currency on p2p platforms or even with high street bookmakers either, it's just they're relatively niche interests...

> When it comes to bets on the outside world, crypto-gambling is arguably a lot worse than a high street bookmaker as it involves a de facto side bet on (i) the value of the crypto asset not declining during the bet duration and (ii) the oracle being reliable. It's not like you can't get odds or participate in more obscure bets or prediction markets using regular currency on p2p platforms or even with high street bookmakers either, it's just they're relatively niche interests...

Very well stated!

> The site acts like the main challenges are legal when really they're technical.

The main challenge, in my opinion, is volume.

The future of online betting is exchange marketplaces, where users/members can both back and lay event outcomes. This removes the reliance of a central player (bookmaker/sportsbook) to support the lay side of the market. Overlays are generally much smaller on exchanges.

However, to achieve this and also to support "trading" (multiple back and lay bets in the same market, based on in-play price movements), an exchange needs a high volume. Betfair is the best known exchange and has serious first mover advantage. I'm currently looking at the England vs India 3rd Test cricket Match Odds and over GBP44 million has been traded on that market alone. Liverpool vs Crystal Palace tonight, GBP700k and there's still four hours until kickoff. The 15.05 Thirsk 7f horse race, currently in-play and GBP650k volume.

All of Betfair's competitors to date have really struggled with this aspect. Betdaq, Smarkets, Matchbook, no matter how good their service offering or how low their commission, haven't been able to attract the same level of betting volume and are thus not as attractive as Betfair. A little bit chicken and egg scenario to be sure.

Anyway, in my view the biggest hurdle Augur will need to clear is that of market volume.

Betfair was bought by the bookmaker Paddy Power. Betfair has both an exchange and sportsbook components. The former is where you bet against other punters and the latter is where you bet against the company. The site seems to steer you by default towards the latter. If you show even minimal profitability on a sportsbook and you'll typically be restricted. Does the sportsbook get first pick on odds on the exchange to lay off liabilities? Do they monitor canny punters on the exchange and take positions accordingly? Are there even chinese walls between the two parts of Betfair and between that and Paddy Power bookmakers. Is this well regulated? Paddy Power are a pretty slick operation but I wouldn't trust them as far as I could throw them.

Just wrote a blog post about Augur and its future challenges: https://www.cultivatelabs.com/posts/thoughts-on-augur

I know - just another armchair hack, but I've been running a company that builds/runs prediction markets inside corporations for the past 12 years...

Lol gambling/speculation might be one of the few places blockchain has product market fit

Product market fit surely, but a long list of technical challenges left to solve as well.

You have better odds in Vegas.

Have you actually looked at Augur? It is up and running and working well.

So was MtGox, for the longest time!

That's not a fair comparison. Mt. Gox grew too quickly and couldn't keep up with the massive security requirements for a cryptocurrency exchange. Not to mention they may have had employees embezzling money. Augur has taken years to refine their strategy and do the launch correctly, and the code is working just as expected. There could still be issues like with any innovation but to compare this to Mt. Gox is not at all fair.

MtGox held total control of the private keys, so I'd argue it was never in a position to be relied on.

You'd think that based around the context of my statements that I'm not an unaware bystander and that I might already know something about Augur, what their tech is and who is involved in it. Guess not.

In a very narrowly defined space, it is something that works, yes, but as always with tech in this space "there be dragons".

As a side note, I stg that every "new thing" built on ethereum is just a chain of underpants gnome logic. Except the "???" is something you can drive a star system through.

> You'd think that based around the context of my statements that I'm not an unaware bystander and that I might already know something about Augur

When something is currently operating, just saying it can't work because of "technical obstacles" is bound to seem like a drive-by comment. The same with saying "there be dragons."

I'm genuinely interested--so can we enumerate some dragons? Can you elaborate?

Could you point me to Dudley's patents? I attempted a USPTO search and didn't find it.

I'm interested in when the patents were issued and the methods they cover.

>>Hard pass. Blockchain and Gambling still don't really go together yet.

  s/Gambling/trading

In Augur's case the provably fair aspect seems to be restricted to the correctness of the order matching and trading engine, similar to other decentralized smart contracts that try to implement exchange functionality.

Online gambling sites like Bovada already have bitcoin deposits and withdrawals, your funds stays stable after a deposit, or you can deposit with credit card and get a check in the mail from Taiwan.