By Alex Kane
One of my favorite events on the sporting calendar is the Masters golf tournament. If you follow golf, you generally understand that April is one of the best months of the year, thanks to the Masters. In 2016, I was attending Drexel University playing on the golf team and studying finance and law. I was extra tuned into the Masters that year having just begun dipping my toe into sports betting.
I still recall the website I visited to inspect the opening odds of each golfer to win the tournament; Vegas Insider. I noticed a golfer near the bottom of the list; Kiradech Aphibarnrat. Kiradech was listed at 1,000 to 1 odds, meaning a $1 bet would yield a profit of $1,000.
1,000 to 1. Less than a 0.1% implied chance to win. Something wasn’t right. I felt that Kiradech was a real player with real talent. The other players listed at 1,000/1 had no chance of winning, but Kiradech was different. I quickly realized that I perhaps knew something the oddsmakers did not; this relative unknown player was on a recent hot streak; something I learned from watching Asian tour golf late at night on the weekends.
I was able to convince a friend, who had a bookie, to place the bet. We placed $10 on Kiradech Aphibarnrat to win the Masters. If we won, our bet would win us a cool $10,000.
Halfway into the tournament, our bet was looking pretty good. Only six golfers stood in front of Kiradech. I remember going back to the same website to check the new odds. Kiradech was now 10/1 to win, quite the move from the 1000/1 just a few days earlier!
Our $10 bet that initially seemed crazy now had a real chance of winning. “You bet on WHO?” turned into “HOW did you make that bet?”
We felt like Steve Carell and Co. in The Big Short (minus a few zeros). We saw something that others didn’t see, made a bet, and then the market realized we were right. What a cool feeling!
It was then when I realized that despite our smart investment, we had no way to capitalize on it. We had no control of our destiny. Instead, we would have to wait until the end of the tournament to see if Kiradech could pull off the impossible.
By Saturday evening, after the third of four rounds, Kiradech had fallen out of contention.
Despite the great trade we made, there was no way to monetize it. There was no way for us to sell what we had bought; Kiradech to win. If we could have done that, we could have sold for a profit, reaping the rewards of our initial risk.
As one of the millions of Robinhood customers at that time, that seemed strange. I could make a trade, but wasn’t allowed to close my initial position. That premise went against everything that was great about having open, transparent, liquid markets.
That’s when it dawned on me; why couldn’t sports betting be more like capital markets? Why does it have to be so binary? Take it or leave it? Us against the house? Why couldn’t I buy and sell with the same efficiency, protection, and control I have when I traded stocks?
After all, how much difference is there between betting on the share price of a stock, and betting on a golfer to win the Masters?
If I can trade in and out of stocks with a few taps on my phone why can’t I do this with my sports bets? To me, none of this made any sense.
Why hasn’t this been done before?
With that, I came up with the idea for Sporttrade.
Stock trading once operated like the current bookie system. Over the years, one has progressed and innovated and the other has remained stagnant. Consumer finance has come a long way while sports betting has stayed the same for 40 years. Thanks to years of innovation and competition in capital markets, we all enjoy an incredibly great customer experience when we buy or sell things like stocks, options, and cryptos.
The basic concept behind Sporttrade is to take all the technology, expertise and processes from the exchange industry and apply them to sports betting.
This means we operate in a completely different manner than a sportsbook. We’re not in the business of betting against our customer / We’re a platform that matches buyers and sellers in a safe, transparent, and efficient manner.
Think Nasdaq. The Nasdaq Stock Market is a stock exchange — matching buyers and sellers of securities that Nasdaq lists. Sporttrade operates exactly the same way but instead of listing stocks, we list sports outcomes like “Serena Williams to win the US Open”, or “Pirates to beat the Cubs.” We match buyers and sellers of “contracts” on the outcomes we list. A “contract” is simply a bet that settles at $100 if the outcome occurs, and $0 if the outcome doesn’t occur.
Here’s how it works:
Scenario: The Los Angeles Dodgers are playing the San Diego Padres. On the Sporttrade exchange, we list “Dodgers to beat the Padres” as an outcome.
On Sporttrade, the price = the probability according to the market.
Say the market priced the Dodgers to win at $55 per contract, which means the market thinks the Dodgers have about a 55% chance to beat the Padres.
To bet on the Dodgers, simply buy the Dodgers. At $55 per contract, you’re betting $55 to win $45 if the Dodgers get the W.
Here comes the cool part. Just like when you trade on Coinbase, your first trade is only the start of your experience. As the probability of the Dodgers to win changes, so does the price of the Dodgers.
If the Dodgers jump out to a 1–0 lead in the 1st inning, their price would jump to say, $65 per contract, matching their new win probability according to the market. All of a sudden, you’re up $10! What you bought for $55 is now trading at $65.
Want to turn a quick profit or cut your losses without waiting until the end of the game? Now you can.
A Better Customer Experience
At the end of the day, this is all about building a better customer experience. We built Sporttrade through the lens of putting customers first. I’ve seen the other side and it’s archaic, opaque and the “house” always wins.
If there’s ever been an industry poised for disruption and revolution — it’s sports betting.
Sporttrade may represent a different style of wagering, but mobile-first, younger audiences, like myself, will understand the model quickly. We have grown up with trading stocks, ETFs, and now crypto and NFTs, with ease and fluidity. We enjoy the dynamism and action. There is clearly a confluence of the trader and the sports bettor, and we believe our platform serves this growing and unique audience.
How do I know? I’m one of them.
I’m a sports fan who watches games every night. I’m also a trader who can’t wrap my head around the deficiencies and inefficiencies of traditional sportsbooks. With Sporttrade, I finally have a platform to bet the way I want to bet — on my terms.
As a customer-first platform, our model will offer lower fees, better odds and give you more control. We will also lead with responsible gaming by offering more controls, trade surveillance and customer limits.
In the end, we’ve built Sporttrade to elevate the sports betting industry with the customer first. Sporttrade will first launch this summer in New Jersey with more states to follow.
That’s it for now. I hope you will join us — I can’t wait!
You can sign up for updates and learn more about the platform at sporttrade.com.