Sporttrade ready to wed the stock market and sports wagering
For perhaps a hundred years or more, sports gambling proponents have likened the pastime to engaging in the stock market. As the sports betting industry rapidly evolves, new avenues and options are opening just about every week, and Sporttrade is poised to marry sports wagering with Wall Street concepts.
The Philadelphia-based company recently raised $36 million in capital funding from some pretty big hitters and plans to launch its app later this year, first in New Jersey.
"Our mission is to elevate the sports betting industry, and truly provide an all-inclusive platform designed for the customer," Alex Kane, Founder and CEO of Sporttrade, said in a company statement. "For two decades, retail customers have benefited immensely from unprecedented innovation in equity trading.
“Sporttrade was created to bring those same great benefits to sports betting, including increased efficiency, real transparency and better pricing."
The plan is to use existing monetary and market exchange technology and to incorporate sports betting to help democratize the industry as a whole. Sporttrade’s customers can trade sports wagers as they would trade shares of stocks.
On the Sporttrade website under the “Better Pricing = Better Odds” subheading, the company explains:
“As an exchange, we don’t bet against our customers or charge a ‘vig.’ We match buyers and sellers at the best available price in the market. Not being the “house” means better odds for you.”
An example used at the site Illustrates the display consumers would see during a game on which they have wagered.
The Eagles-Cowboys NFL game used as an example shows Philadelphia leading 21-19 with more than 12 minutes remaining in the third quarter. The display presents a buy option and a sell option for both teams to win outright.
In the example, the “sell” on the Eagles-to-win bet is 55; the "buy” is 56. On the Cowboys’ in-game play, it was 44 on “sell,” 45 for the “buy” option.
A quick note on the numbers, per Sporttrade: Those aren’t American odds being presented, they’re “probabilities” for success.
“We present you with probabilities because we think it's a better framework than American odds. You can convert odds to probability and back using some simple calculations, but we strongly believe in our 0 to 100 probability approach. In simple terms the price of a contract equals the probability of the outcome occurring.
“For example, if the Phillies are trading at a buy of $55, then the probability of them winning is 55%. If they do win, then the contract settles at $100, for a profit of $45 per contract.”
Sporttrade provides the option for individual bets to be held or bought/sold as the value changes – before or during a game – with the primary emphasis on in-game flexibility for the user.
This company has – as mentioned above – some strongly respected investors: Jump Capital, Hudson River Trading, Impression Ventures and Tower Research Ventures, as well as former MGM Resorts International CEO Jim Murren and former CEO of the Nasdaq Stock Exchange, Tim Wittman.
"We are thrilled to back Alex and his amazing team at Sporttrade,” Jump Capital’s Yelena Shkolnik said in a statement. “They have built a retail trading solution for betting, reflecting pricing based on win probabilities and allowing users to easily trade in and out of any position.
“To enable low-cost wagers, they've assembled a team from across capital markets and betting, locking in partnerships with institutional market making partners to enable a powerful and liquid exchange.
"The U.S. bettor will finally have a transparent open market of sports betting wagers to trade, and we couldn't be more excited to be a partner."
The platform will present clients with a sort of sports-bet stocks portfolio. Similar to a brokerage account, the interface provides the value of customers' wagers in real time.
Sporttrade will launch only in legalized and regulated sports betting markets but, as the industry continues on its undeniable upward path, as many as 30 states could be legalizing single event wagering by the end of 2022.
Another investor, Delavan Lake Investments, co-founded by David Frohardt-Lane and Brandon Moran, said Kane’s focus on a platform using the U.S. capital markets as an influence was attractive.
"When we first met with Alex in 2019, he had a vision to transform the existing sports gambling model and leverage the benefits of stock market investing for the recreational sports trader,” Frohardt-Lane said. “His drive to apply financial markets principles to benefit the customer was the primary reason we knew he was the right person to partner with in this revolutionary venture."
Sporttrade now boasts a team of more than 50 employees, from fintech to trading and sports betting professionals.
This would be the first regulated sports betting exchange in U.S. history.
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