SportTrade is poised to launch it’s very first sports betting exchange in New Jersey; however, it remains unclear whether the limited number of bettors in the state will provide the site with the necessary liquidity to make it a success.
Recently, Twin River Worldwide Holdings, a Rhode Island-based casino operator, announced that it had struck a deal with Sporttrade, a Philadelphia-based startup. The plan is to piggyback on Twin River’s New Jersey online sports betting license.
Last April, Twin River struck a deal to acquire Atlantic City three casinos from Caesars Entertainment and Eldorado Resorts, including Bally’s.
While that acquisition is still pending, it does give Twin River the right to operate three online sports betting sites, and it plans to offer one to Sporttrade for its proprietary exchange technology.
SportTrade Could Face Obstacles
Alexander Kane, SportTrade CEO, says his company’s revolutionary technology can succeed by “applying capital market structure and technology” to the US sports betting market. Kane promises “a first-of-its-kind sports betting platform that will be fair, transparent and liquid” while also offering “significantly lower prices than traditional sportsbooks.”
However, that’s assuming New Jersey’s market conditions will allow SportTrade to succeed. Back in 2015, the state issued an exchange betting license to the US division of Betfair, a UK operator (Betfair is now part of Flutter Entertainment, which also owns FanDuel).
Unfortunately, Betfair was limited to horserace betting. Betfair launched a few months later, but struggled to succeed, despite allowing Garden State bettors to play in Betfair’s European exchange.
While pari-mutuel horse racing has enjoyed widespread pooling in the US under the 1978 Interstate Horseracing Act, SportTrade’s exchange will not share liquidity across state lines; this is due to continuing worries over potentially violating the 1961 Wire Act.
How SportsTrade Works
SportTrade operates as a peer-to-peer marketplace that frees sports bettors from bookmakers. The platform allows gamblers to wagering on and against sports outcomes. It operates in a similar fashion to the stock market.
SportTrade hosts a real-time mobile platform where sports bettors can buy and sell their predictions of sports outcomes. Bettors can trade in two different markets:
Matchup markets are for head-to-head games. An example of a Matchup market could be Indiana Pacers vs. Boston Celtics. Predictions in this market trade between $0 to $10, with a winning prediction paying out $10.
Futures markets are for special competitions. These can include the PGA Masters Tournament, the World Series, and the NCAA Basketball Championship. Futures markets can be up for several months, and as in Matchup Markets, predictions trade for between $0 and $10, with winners getting a $10 payout.
Let’s say you bet $30 on the Boston Celtics. The Celtics are then considered a holding because if they win, you could get $200. That means the value of your Celtics holding will range between $0 and $200. If the Celtics play well, the value of your holding will increase.
On the other hand, let’s say you bet against the Indiana Pacers. They are then considered an obligation because if the Pacers win, you must pay out $100. If they don’t win, you pay nothing. The cost of your obligation on the Pacers will range between $0 and $100. If the Pacers play well, the cost of your obligation will increase.
Twin River Jumps into the New Jersey Online Gaming Market
Twin River has no direct experience with online gambling; it acquired an online gambling operation in Delaware when it acquired Dover Downs Hotel and Casino in 2019.
While its deal for Bally’s Casino in Atlantic City has yet to be finalized, Twin River has already struck two online partnerships; it partnered with Esports Entertainment Group for sports betting, and with PointsBet for an online casino.
Twin River CEO George Papanier thinks that SportTrade’s betting exchange will be “a new, exciting online product for our guests” and that SportTrade itself was “a fabulous addition to our growing list of value-added partnerships we’re building in Atlantic City.”
It looks like Twin River is making a serious effort to revitalize Bally’s as the leading player in Atlantic City, investing both in the online sports betting market, as well as refurbishing the physical casino.