ON the face of it, the devastation which has seen Bitcoin and cryptocurrency assets plunge to 30 per cent in value should spell disaster for the GAA’s exploration of the NFT market.
The Pitch has learned that Croke Park has paused the launch date of its ‘non-fungible token’ collection – a series of unique, fully-licensed digital content clips recorded on the blockchain, for fans to purchase and exclusively own.
The GAA’s commercial division will instead extend its pilot program to record and consider how the marketplace reacts to its first volatility test as crypto assets continue to nosedive – with $ 2 trillion dollars (two-thirds of the market) already wiped out since November.
While the losses are astronomical, the timing of the implosion could not have come at a better time for the GAA, with none of its NFTs in the marketplace, and causing no impact on customers and fans.
With no price yet fixed on its product, there is no devaluation or future pricing impacts and if anything the turbulence will help Croke Park settle on a value and what the overall package should look like.
Future GAA NFTs could be sold as individual offers or part of packages which include match tickets and other frills.
So nothing ventured – publicly at least – nothing lost for Croke Park, and if anything a more realistic market will exist after this crypto recession – whenever it eventually repairs itself.
One of the reasons why sports NFTs should bounce back is that assets can simply be put down to content over concept.
Non-fungible tokens, while digital, are not invisible assets – they retain their value through the actual data (and imagery) they contain and like all blockchain technology are incorruptible.
Crypto retains no residual value, and as we can see currently, is quite frothy when it comes to its actual value – Bitcoin has dropped from $ 64k last year to just under $ 20k today.
Therefore NFTs are a more stable asset – except for collectors who pay inflated prices for clips – a Bitcoin for the thoughts of the fan who paid $ 21.6m for a digital image of Lebron James last year.
If you own a limited edition image or piece of footage which you wanted badly enough to purchase – at a non-hyperinflated value, and which has been officially licensed to you by the rights holder, then that ownership remains secure – that clip will not suddenly fade or disappear.
The GAA’s strategy, even before the current storm, was to pilot a small number of NFTs featuring five hurling and five football clips – as part of a soft launch, with 10 tokens of each piece of digital media licensed.
From each of the ten NFTs issued per clip, one will go to the GAA, one to the GPA and eight for public sale, with the scheme widened to feature more players and teams outside of the initial 10 pilot packages, based on the success of the initial offering.
For now, the GAA will continue to assess global markets – which some commentators believe may be bottoming out – although as of last night Bitcoin keeps slipping downward.
A final word of warning for NFTs though – comments by Bill Gates at a TechCrunch summit last week will not have boosted confidence in the sector. The Microsoft founder described crypto assets as’ 100% based on ‘greater fool theory’.
Gates said he will not be investing in “expensive digital images of monkeys”, a reference to the Bored Ape Yacht Club NFT collection, where the cheapest artwork was $ 429k at its peak – for a cartoon digital image of a gorilla.
While the short-term future for NFTs is undoubtedly weak, from a $ 40 billion dollar high last year, the GAA will have to wait it out before getting that non-fungible ‘monkey off its back.
SINCE Horse Racing Ireland’s Board-approved alliance with the Tote, the governing body has faced questions about impartiality and conflicts of interest.
How, on one hand, can HRI operate the Tote while on the other, be the regulator of the € 60m marketplace occupied by on-course, independent bookmakers?
The question was raised again this week when bookmaker Anthony Kaminskas told The Pitch that he believed HRI may be conflicted in her interests.
“I think there’s a conflict of interest there, and one that doesn’t make any sense to me,” said the former Paddy Power trader, who now owns 27 pitches across Ireland’s leading tracks.
The bookie’s views follow similar pronouncements by other bookmakers, where the general question is how can a body which regulates one side of a business, operate and run a rival arm, and all the while claim impartiality.
The best-placed person to answer this ongoing issue is Pat Brennan, the Racing Services Manager at HRI, and a five-year veteran of Tote Ireland, where he worked in Commercial Sales and Customer Services at the betting pool.
“I think it’s probably an age-old (charge) levied against HRI and the on-course bookmakers,” he explained.
“It’s important to point out that our interaction with on-course bookmakers is statutory. We regulate and license bookmakers, and operate that side of the business under a strict code of conduct.
“While Tote is a subsidiary of HRI, I don’t necessarily see them as rivals – they both cater for two separate markets – the betting ring punter and the Tote punter and the betting ring experience is very different to the Tote experience.”
The view of Pat Brennan is that the Tote gambler is investing small stakes in the hope of big wins, while the betting ring punter is renowned for larger cash investments with greater value.
His opinion differs from critics who believe that the Tote benefits from a competitive advantage, which gives it the upper hand when it comes to positioning and visibility around race tracks, close to bars and in hospitality areas.
“I just don’t see them as rivals at all, and the argument that perhaps the Tote gets a beneficial leg up… I just don’t see that and never have, having worked for Tote for five years,” he added.
Brennan points to this weekend’s Dubai Duty Free Irish Derby Festival at the Curragh where he said a considerable number of new positions have been created for on-course bookmakers to operate around bar areas, within the main stand.
Another issue is fees, an area of criticism from some sources, where on-course bookmakers are hit with a large number of costs and levies for pitches, racecourse entry on race day (five times the entry price for normal punters) and registration costs.
“Any of these fees are not dictated by HRI – they are administered (by HRI) on behalf of the racecourses or by the racecourse itself, where there is no financial benefit to Horse Racing Ireland,” added Brennan.
Certainly more on-course bookmakers are leaving the trade than are coming in. Does this have anything to do with greater pressures to make a profit, particularly around smaller midweek meetings?
“In the last two years five bookmakers have retired, which is not unusual, given the demographic and age profile, a natural progression, with two new operators coming on course,” he confirmed.
There is undoubtedly a downturn in the revenues generated by bookmakers at race tracks – from € 252m in 2007 to € 52m in 2019 (pre-Covid interruption), which can be put down to punters migrating to online and digital transactions.
Whatever issues exist between on-course books and HRI, Pat Brennan believes that the partnership between the racing body and its representative group – the Irish National Professional Bookmakers Association (INPBA) is strong and the work between both sides is extensive and ongoing.
As close to a racing certainty is that the issue will return on loop as revenues and profits continue to shrink for on-course bookmakers, but that is more down to the environment than claimed conflicts of interest, insist the HRI side of the fence.
A survey of 1,000 Irish sports and live entertainment fans has thrown up some interesting data for the sponsorship industry.
The ‘What Fans Want’ study by The Brand Fans agency, and launched at last week’s European Sponsorship Association event in Dublin, “revealed expectations of fans from the world of sponsorship and brand activation”.
The Brand Fans managing director Daragh Pearse told The Pitch: “The data gives us real actionable insights that demonstrate the passion, commitment and expectation fans have of sponsors and rights holders.”
The Top 5 priorities from the ‘What Fans Want’ survey:
1. To be understood by Brands & Rightsholders
2. To be treated like humans
3. For societal issues to be championed
4. For sponsors to be culturally relevant
5. More rewards and value
The Pitch’s own personal favorites – cold beer and warm chips – didn’t make the grade.