Frank Sinatra famously sang about New York that if you can make it there, you can make it anywhere.
Well, Sporttrade is taking that concept and bringing it across the Hudson, as New Jersey will not only be the first state the exchange betting company will take live, it will be the state intended to serve as the proof of concept for the nascent company.
“This is all about New Jersey, this is about proving this can work, this is about demonstrating that customers are adapting to what we’re doing and that they like the tighter spreads, the zero delays, the approachable user interface,” said founder and CEO Alex Kane. “And when we nail New Jersey, we’ll start going to other states.”
Kane says he is “very confident” the trading platform will be live in September, in time for the start of the NFL season. In the meantime, the app is live in the “performance lab” and being used by would-be customers.
One of them loves it so far.
This is your captain speaking
“The Sporttrade product is day-trading for NJ sports betting,” said noted gambler — and New Jerseyan — Capt. Jack Andrews. “They’ve created a very low-friction environment to do just that. It will appeal to those with a financial background. It will appeal to those who want to approach sports betting with less of a ‘buy and hold’ approach and more of a ‘get in, get out, move on with my day’ approach.”
— Alfonso Straffon 🇨🇷🇺🇸🇲🇽 (@astraffon) July 14, 2022
How it works is pretty much exactly as Andrews described: It’s day trading for sports betting. Imagine the Yankees are playing the Mets, and let’s say the Mets are -120 favorites. Instead of betting money on the Mets, you’d be “buying” shares of the Mets at about 54.5 cents (roughly -120 odds).
As the game progresses, the value of those shares will go up or down depending on the flow of who’s ahead and by how much, and it will close at either a dollar (the Mets win!) or zero (the Mets lose). And you can buy and sell in and out, with the knowledge there will always be someone — be it a fellow trader or, more likely, a market maker — on the other end of the transaction.
“No spinny wheels and loading screens. We have zero delay transactions, no five-second in-play countdown where the odds change,” said Kane. “Plus the odds are better, the friction is a lot lower, and I really think we’re going to invent, discover, define, and call first dibs on trading in-play.”
Only if you win
Sporttrade makes its money by charging a 2% commission on profit; if you lose, you pay nothing, if you win, it’s 2% of your winnings. Some quick back-of-the-envelope math demonstrates this is a much better deal than the typical vig charged by the sportsbooks. And it plays out when comparing the odds at traditional sportsbooks compared to what the payouts would be at Sporttrade.
“I didn’t think I’d like trying to adapt to the Sporttrade odds displaying in implied probability, but I quickly found it very easy to understand,” Andrews said. “I didn’t think I’d like selling out of a position in-game, but the low margin and the reasonable commission make it viable and exciting. In before Aaron Judge comes up to bat, out after he gets a double. In before Zack Wheeler faces the weak end of the Nationals lineup, out when he mows them down on nine pitches. Buy at 30, sell at 35. It’s very intuitive.”
Of course, the big hurdle for Sporttrade is persuading bettors other than Andrews to give its service a whirl. Kane, however, isn’t sweating that. He believes the groundswell will be there.
“We don’t have to get the average bettor on day one,” Kane said. “There is so much volume out there, and not just from professional bettors, but also the avid, aspirational bettors. These are folks who are sufficiently bankrolled, not messing with same-game parlays. About 20 to 30 percent of the volume in New Jersey is avid bettors.”
And Kane thinks they’ll flock to his app once they realize the money is right.
From there, Kane believes he can attract a whole new market to sports betting, people who have cut their teeth in the Robinhood streets.
“If you like trading stocks, you’ll like trading sports,” Kane said.