The ability to bet on sports in a fashion similar to that of trading stocks could soon be offered in the U.S.. According to Bloomberg, Tradesports, a sports-betting exchange, is looking to enter the U.S. sports gambling market, thanks to the proliferation of the activity’s legalization across the country. Beta testing is already underway, and a larger rollout is expected next year, provided the platform can receive approval by state regulators.
Tradesports is being introduced by Ron Bernstein, one of the founders of the now-defunct Intrade political exchange, which shut down six years ago. It is launching a free-to-play beta this week and offers users the ability to buy and sell positions on sports events, similar to what is seen with Betfair in Europe.
The platform made an appearance out of Ireland almost 20 years ago, targeting the U.S. market. However, it fizzled because of the ban on sports wagers before reemerging in 2014 with the rise in popularity of daily fantasy sports. It was able to keep going for about 18 months before shutting down as interest waned.
Now that sports gambling is taking hold in the U.S., the timing may never be better for a sports-centered exchange. Bernstein explains, “As long as we can create an offering that isn’t too intimidating, we think there’s a really big niche in the professional trader market. But you can really broaden the definition of a ‘trader’ to include anyone who uses Charles Schwab or TD Ameritrade. Everyone trades now.”
19 states have already legalized sports gambling and more are coming. The introduction of no-fee trading, which has been launched by Ameritrade and Robinhood this year, has ushered in a new market of traders and helped to expand the industry. Bernstein adds, “Trading is a thing now. People understand what it is.”
In comparison to conventional sportsbooks, traders will find that they don’t have to give up as much of their profit. Typical sportsbooks keep around 6-7% of the winnings, but Tradesports’ fees hover only around 3-4%.
The beta test will cover three NFL games; however, implementation of the platform won’t be easy. Because of the lack of federal regulations on sports gambling, Tradesports has to seek a license in each legal state and also has to fence off each of the states from one another – a trader in New Jersey cannot legally work a deal with someone in Pennsylvania, for example. Bernstein’s confident that it can work, though, and asserts, “We have really good evidence that this is popular. And we think this is much better circumstances than 15 years ago.”
