Most of the celebrating over the Supreme Court’s ruling on sports betting last spring came in states other than Nevada.
But two young entrepreneurs in Las Vegas also raised a toast.
Ian Epstein, 29, and Luke Pergande, 30, are co-founders of Prop Swap, a secondary market for sports bets. It’s like the StubHub of propositions, a website (PropSwap.com) where you can bet or sell a futures ticket on outcomes such as who will the Super Bowl, the national championship or the Stanley Cup.
Instead of only having sellers from tickets bought in Nevada, they can now offer legal bets made in New Jersey, Mississippi, Pennsylvania, West Virginia, New Mexico, Delaware and Rhode Island, too.
“This is going to be a huge game-changer for us,” Epstein said. “We’ve had an issue of more buyers than sellers. All of a sudden, the supply of what we can sell is about to explode. We’re going from one state to, they estimate, 32 states in the next two years.”
Here’s how it works: Say you bet the Toronto Raptors to win the NBA title at 40-1 when the Westgate SuperBook released opening odds last summer. The price on the Raptors has since dropped to 6-1. It’s an ideal opportunity to try to find a buyer for that 40-1 ticket and lock in a profit now. The PropSwap site includes a link to calculate the potential market value of a live ticket.
The seller is charged 10 percent of the transaction price while the buyer pays a three percent deposit fee.
“We’re creating an industry here,” Epstein said. “We legitimately have zero blueprint to follow. We have no competitor so far.”
The motivation to start PropSwap goes back to 2013 when Pergande had a 50-1 ticket on New Orleans to win the Super Bowl (they didn’t) and found out the odds had dropped to 15-1 after a fast start. He wanted to sell the ticket but Epstein informed him that there was no established secondary market.
Less than two years later, in September 2015, they launched PropSwap.
The idea initially was rejected by the Nevada Gaming Control Board. After nearly giving up, they were introduced to Reno-based lawyer Dan Reaser, who had previously represented the Nevada Gaming Commission and the Nevada State Gaming Board while working in the Attorney General’s office as Chief Deputy for the Gaming Division. Reaser convinced the board to reconsider its legal interpretation of the PropSwap proposal.
“We would not be where we are without that guy going in there and representing us,” Epstein said.
Epstein and Pergande have met with states to confirm that no laws would be broken if customers in those jurisdictionsare buying tickets. They’re now taking buyers from New Jersey, New York, Illinois, Pennsylvania, Massachusetts, Mississippi, Connecticut, Ohio, Indiana, Kentucky and West Virginia.
Pergande, who previously worked in finance for Bloomberg, has moved to New Jersey to start a second office. PropSwap also has contract employees in other states where sports-betting has been legalized so that tickets can be verified by sports books before any sale is completed.
Epstein, who worked for Cantor Gaming/CG Technology from 2012-15, said they need to continue to educate bettors on the benefits of selling a ticket in certain situations.
PropSwap received numerous inquiries from people who had tickets on the Vegas Golden Knights to win the Stanley Cup last season. There were offers of $4,000 for tickets that would have paid out $10,000, but most people decided to ride it out, Epstein said. Those bettors were left with nothing but a losing ticket in the end.
PropSwap lives by the “pigs get fat, hogs get slaughtered” motto.
“We tell people, ‘Come get fat with PropSwap,’” Epstein said. “It’s OK to wait a little bit to sell your ticket but you don’t want to get too greedy. You can get slaughtered.”