Interesting discussion going on and my take:
1. crypto users are actually Bitcoin users. Agree that more altcoin users are also now betting but you generally find crypto sportsbettors are just using Bitcoin. Not so much because of the tech, but the wider access. Been tempted by smart contract types like ETH and even TRX but the lack of access, wider markets and good odds so far puts me off. Fairlay I like because P2P you can find good odds especially on the longshots.
2. I think the future for crypto users is non-custodial yes, but the future for betting with crypto probably lies in 2nd layer settlements (which even Ethereum is starting to use). Fees for tx is one thing, but I haven't seen smart contract fees lower than $5 since June and if you need 2 smart contracts to place and then claim winnings, it's really not ready yet for betting.
Degens is P2P as well and there are no gas costs if you enter your own odds. Gas costs are only for the makers. However there is a gas cost to claim your winnings which currently is around $1 which is crazy as gas costs used to be a few pennies!
Yes, I agree we'll need to way for 2nd layer technologies to flourish before this niche space explodes. With the current solution in place on ethereum, it's not possible to bet in the middle of the game due to gas latency which is unacceptable. This isn't a problem on a centralized site like Fairlay though.