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In this installment of the CalvinAyre.com Innovation in iGaming profiles series we focus on Tradesports.com, a “completely different fantasy sports game”, according to Founder and CEO Ron Bernstein.
Instead of having players making up a team as we see in traditional fantasy sports sites, Tradesports contestants buy “stocks” in the form of a yes or no prediction. Contestants are challenged with making smart picks and purchasing the right amount of shares in each of their picks, so when their “predictions accuracy” is determined after the event, they have the highest account value in comparison to the other contestants.
To learn more about the innovation behind Tradesports, I sat down with Bernstein to discuss his background, how he came up with the idea, why his product is different and the future of fantasy sports in America.
Becky Liggero: Thank you so much for joining me today, Ron. It’s always a pleasure to have a sports betting enthusiast in my chair. Tell me about your professional background and how it led you to Tradesports?
Rob Bernstein: I’m an old school commodity and options floor trader, having traded in the pits in New York and in London…and I really miss those days…it was always during lulls in the markets that conversation would turn to sports (and sometimes page 3!).
We were already trading March Madness basketball futures using a $1-$64 dollar scale (where the winning team paid $64) with some pretty good size at stake. Then we heard a story about a pit in Chicago with huge pots and that a clerk entrusted to hold the stakes had run off with whole pot, a couple hundred grand is the rumor. The next convo was talk about “trading sports like stocks” on a proper exchange. Online trading and no credit risk.
As technology and online trading started to take over in the late 1990’s it was to be expected that live sports trading would happen too. I worked with a very smart group of guys to found Intrade in 2001 with and then Tradesports in 2003 from Ireland and it’s been an interesting ride since then to say the least.
BL: Wow, 2003? Sounds like you’ve always been a bit ahead of the curve. So tell me why you decided to remove drafts and rosters from your fantasy sports offering and replace them with “yes” and “no” picks?
RB: Our background is in prediction markets and person to person trading–“Will this happen?, Yes or no?” and trading the probability of Yes or No happening.
The fantasy roster game is super popular, but I think by default…there hasn’t been a new game in years. Yes, the duration has changed and the daily games have now exploded in the states but that’s because players are thirsty for any action they can get and there’s plenty of action now.
The fantasy contest prizes are huge and Draft Kings and FanDuel do a great job with their sites, with educating players and with raising the profile of the fantasy overall, but the game is what it is–very stat heavy and doesn’t embrace the fans of a team or player.
The Tradesports game is different, and only becauseit’s different, does it have a chance to succeed while the big boys are at war.
BL: You mention a background with prediction markets. Tell me about your fascination with Prediction markets and why the data from these markets is so valuable.
RB: Prediction markets are something like “the Internet’s crystal ball”. Our model can take an infinite stream of opinions, collected in real time and reactive in real time and backed with real money–the best motivator ever– and distill those opinions into a simple price. The price improves with more players, more points of view. And has proven over and over again to be incredibly accurate. That price about many things can serve society as an info benchmark to help us all prepare for whatever might happen.
Plus, its just plain fun to make predictions and see who’s right!
BL: Yes, that is true! So we all know the US is funny about sports betting and its legality- how is it that Tradesports is 100% legal and compliant with UIGEA?
RB: Tradesports is a game of skill, full stop. We have reams of data showing some players win much more than they should if it were just based on chance.
We operate in the states that recognize skill based gaming and permit it for real money. We are also UIGEA compliant because our contests don’t involve the creation of a “fantasy or simulation team” but instead involve a plurality of outcomes.
There are a lot of opinions about what UIGEA really “carves out” (and no legal tests for any of them yet), but the fundamental fact many are not aware of is that if you don’t violate a state law, you can’t violate UIGEA. Our full “Legal” is on the site here.
BL: Got it. I know it’s hard to imagine, but what if the US actually opened up to real money sports betting. How would this impact the fantasy sports market?
RB: There’s a definite place for fantasy from now on, especially for real money like there is now. It’s a game of strategy, and it’s fun to play. But there’s nothing quite like the heat of a straight up bet.
When the industry figures out how to make the politicians comfortable with betting–and it’s when and not if– you’ll see a lot of re-branding by the fantasy sites into betting sites or services that offer both. It’s the Trojan horse that is needed to possibly break the LV casino’s lock on sports betting in the US.
For me personally, I remember fondly the days when Tradesports had 200,000 customers trading sports person to person.
BL: Ok, so while waiting for the US to open up to sports betting, what other markets are you looking into besides American sports and who is your target audience for these markets?
RB: We have had a lot of fun with our Oscars contests, we have weekly movies contests, and we even have real money contests on things like the Bachelor TV show.
We’ve also just started a real-money, real time stock trading contests where players compete for prizes based on day trading portfolio performance. The best trader wins the contest.
We’ll try anything that has the right skill element. You can’t deny there is skill in sifting through the emotions and tears of a spurned group of bachelorettes and trying to predict who gets the rose!
BL: So true! Sounds like you’ve got a lot cooking there, Ron. Thank you for your time today and we look forward to watching your progress.