A company launching a platform that allows people to trade stakes in sporting events plans to start offering its service in Louisiana in 2023.
Sporttrade said its partnership with Penn National Gaming will allow the company to enter the state, pending approval from the Louisiana Gaming Control Board. The platform will operate under the same state regulations as mobile sportsbooks, so people will not be able to participate if they are in a parish that didn’t approve sports-betting in 2020.
Alex Kane, CEO and founder of Philadelphia-based Sporttrade, said the platform works like Robinhood or Coinbase, but with participants buying and selling interest in games instead of stocks or cryptocurrency.
For example, if LSU has a 25% chance of beating Alabama in a football game, customers can invest in the outcome and change their position based on how the Tigers are expected to do. If LSU’s odds of winning drop to about 20% before kickoff, the customer can buy more shares. And if the Tigers do well in the game and bring their odds of winning up to 60%, they can sell some or all of their interest.
“The key is you have live positions that have a live value,” Kane said. “You’re building a portfolio and checking and monitoring it live.”
Sporttrade is set to launch in New Jersey in the middle of the year and Colorado is expected to follow closely.
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While a sports trading exchange doesn’t exist yet in the U.S., Kane said similar systems are up and running in the United Kingdom. Over there, betting on exchanges account for 7% to 10% of the total amount wagered.
Kane said he expects sports exchanges will account for a bigger share of the U.S. market, because of the familiarity people have with day trading and the stock exchange.
“I think the amount wagered through our exchange will be disproportionately higher than a traditional sportsbook, because you can trade in and out during a game,” Kane said. This will allow customers to stretch their money further.
When Sporttrade launches in Louisiana next year, the plan is to start letting customers take positions based on the line in pro and college football games, pro and college basketball, Major League Baseball and professional golf. As the service grows and more customers come on line, futures bets, such as taking a stake on how many games a team will win, and prop bets, taking an interest on how a player performs, will be offered.
Kane said the narrow focus will make the exchange more liquid by concentrating the action on popular events.