SECAUCUS, N.J. — When bettors open traditional sportsbooks, they get little choice in their odds. Bettors can choose the odds they’d like to bet on. But bettors can’t request a bet at -110 if the odds are set at -130. Even when bettors place a bet at -130, a sportsbook may offer odds at -140 before bettors lock their bets in. Traditional sportsbooks have bettors at their mercy.
However, betting exchanges work differently, as a session at the SBC Summit North America revealed on Wednesday. Bettors can set odds that they’d like to trade at in the hopes that the price will move. If the line moves, then bettors’ wagers will go through. Bettors can also take advantage of market movements to buy and sell bets in real time. This allows casual bettors to find better prices more quickly.
Scott Shechtman, Head of New Markets at NASDAQ, noted the agency that markets could grant bettors.
“We can create the opportunity for players to actually have that control,” Schectman said in an SBC Summit panel. “It gives everyone the opportunity to impose your skill, for better or worse.”
Agency, Sports Betting, And Betting Exchanges
A lack of agency isn’t a criticism of traditional sportsbooks. It’s part of their business model. Sportsbooks offer bettors prices with house advantages—the vig—built into each line. As much as a sportsbook’s lines may move in response to sharp money, sportsbook lines aren’t priced at fair market value.
In contrast, a betting exchange’s market converges on a fair price. However, bettors don’t have to accept that price. They can place limit orders, which are proposed trades. So, a bettor can place a limit order for a -110 bet if the odds are at -130. If the market moves 20 points, then a bettor’s wager will go through. If the market doesn’t make it to the bettor’s limit order, then that bet won’t be placed.
This isn’t just about a bettor’s budget. It’s also about giving bettors a level of control that doesn’t exist in traditional sports betting. Companies like Sporttrade are part of the larger trend of tech companies democratizing the internet. As Robin Hood did with investing, Sporttrade made sports betting accessible to bettors and put them in the driver’s seat.
“That’s really the idea behind Sporttrade,” Sporttrade founder Alex Kane said in an SBC Summit panel. “To bring all of these capital market terms to the sports betting ecosystem, including execution quality, liquidity, and transparency.”
As new entrants like Sporttrade create new betting options for bettors, it’ll be interesting to see how traditional sportsbooks respond.
And how bettors view traditional sportsbooks after trying a betting exchange.