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Sporttrade has secured market access to Louisiana through a partnership with Penn National Gaming and in Indiana through Caesars Entertainment. The sports betting exchange expects to go live in these markets in 2023, following a mid-2022 New Jersey launch and late-2022 launch in Colorado.
Sporttrade’s platform allows bettors to wager against each other on an exchange that resembles a stock market. Bettors offer wagers on the exchange, which can be accepted by other bettors, and exchanges provide opportunity to shop for odds and avoid being limited by bookmakers.
Sporttrade CEO Alex Kane views Louisiana and Indiana as critical to his company’s success.
“Obviously, we’ve just seen the Louisiana numbers are quite impressive (since its January 28 launch), and Indiana has shown itself to be a very strong market as well,” Kane said Tuesday in a phone interview with Gaming Today. “And I think regardless of the state, if sports trading ends up being a vertical as we think it is, it’s ultimately going to be in every state.”
Kane anticipates widespread adoption of exchange betting because it attracts bettors who are unprofitable to traditional sportsbooks. Rather than charge vigorish on losing bets, Sporttrade takes significantly smaller commissions on winning wagers, and a bet’s outcome doesn’t affect Sporttrade’s profitability. Wagers can be limited by the market’s liquidity or what bettors are willing to accept.
Will Sporttrade Market Access Extend To New York?
Since launching on January 8, New York’s betting handle has been on a record-breaking pace. In previous interviews, Kane sounded reluctant about launching in New York due to the 51% tax rate on gaming revenue and high license costs. Kane still believes New York’s tax rate and license fees are too high.
But he also views New York as a “medium-term goal” for Sporttrade. Manhattan’s financial traders are the types of customers Kane hopes to attract to Sporttrade.
He also believes sportsbook operators could benefit from partnering with Sporttrade.
“If you’ve seen the market share numbers operator by operator, and you’re looking at that tail end, some of those operators are quite well-capitalized. I think they will begin to look at alternative ways to attract customers and gain market share,” Kane said. “I think Sporttrade is going to be a perfect candidate to gain market access that way in a state like New York.”
New York has licensed nine mobile sportsbook operators, although not all of them have launched yet. Sporttrade’s access to New York would depend on New York’s willingness to allow new online gambling operators. Kane also hopes New York lowers its sports betting tax rate — something DraftKings hinted at but influential state Senator Joseph Addabbo threw cold water on — by the time Sporttrade was ready to partner with a New York operator to gain market access.
Much can change in the three- to five-year window through which Sporttrade is viewing New York. But given the uncertainties regarding New York market access, bettors shouldn’t expect a Sporttrade New York launch any time soon.
Sporttrade’s PNG And Caesars Partnerships
Louisiana and Indiana require online gambling operators to partner with land-based casinos for market access, so Sporttrade needed partners in these states. Kane chose his partners with possible collaborations in mind. Consequently, Sporttrade is considering new ways to attract traditional sportsbooks’ most troublesome bettors.
“Specifically, for someone like Davy Day-Trader, when he sees what this [Sporttrade] is, he’s going to see that he really lives in both worlds,” Kane said. “He’s either the sports bettor de jour with a $50,000 sports bet, or if sports betting isn’t happening on a given day, he’s ripping $200,000 market orders, scrabble-bagging the ticker out of some bag.”
While Sporttrade gains access to critical markets, Penn National Gaming and Caesars get shares of new revenue streams through their deals with Sporttrade. It’s little wonder they partnered with a company with the potential to attract expensive customers away and the potential to be commercially successful.
Even before its first launch, Sporttrade is setting up win-wins to build future successes.
