Sports Betting Exchange Firm Sporttrade Gains $36M in Funding

Sports Betting Exchange Firm Sporttrade Gains $36M in Funding

Sporttrade’s unconventional approach to sports wagering got a boost with $36 million in funding from investors that include some high-profile names from the gambling and investment worlds.

The Philadelphia-based brainchild of 27-year-old Alex Kane, Sporttrade’s sports wagering enterprise is based on the same basic principles of a stock market. Participants buy and sell their interests in an event with sellers and buyers being matched by the operator. Unlike traditional sports wagering, the “bets” are not banked by the sportsbook.

Sporttrade has been in incubation since 2018 and now gets a boost in street cred and financing with the multi-million-dollar investment from a group that includes Jim Murren, former CEO of MGM Resorts International, and Tom Wittman, former CEO of the Nasdaq Stock Exchange. Others are lead investor Jump Capital, Impression Ventures, Hudson River Trading, and Tower Research Ventures. In addition, Sporttrade issued convertible debt to Nasdaq Ventures in connection with the transaction.

Funding will be put toward customer acquisition and expansion into additional legal sports betting states. The development was announced Tuesday in a news release.

Right now, Sporttrade is eyeing a primary market — New Jersey sports betting. Sporttrade entered into a multi-year deal with Twin River Worldwide Holdings, now Bally’s, in August to enter New Jersey.

The total sports betting handle in New Jersey in May was $814 million, which will likely be the highest in the nation for May by a wide margin and one of the best months ever.

“Our mission is to elevate the sports betting industry by applying capital markets principles and technology and to place the customer at the forefront,'' Sporttrade founder and CEO Kane said in a news release. "Today marks a significant broadening of our coalition to achieve that mission.”

Looking for 2nd Half of 2021 NJ Launch

Pending approvals and licensing by the New Jersey Division of Gaming Enforcement, the Sporttrade iOS app will be launched during the second half of 2021, according to the company’s statement. Sporttrade points out that it is the only sports betting exchange in the U.S.

The company has 50 employees, mostly working remotely in the Philadelphia area. It plans a workspace across the Delaware River in South Jersey, according to published reports.

"We are thrilled to back Alex and his amazing team at Sporttrade. They have built a retail trading solution for betting, reflecting pricing based on win probabilities and allowing users to easily trade in and out of any position,” Yelena Shkolnik of Jump Capital said in the release. “To enable low-cost wagers, they've assembled a team from across capital markets and betting, locking in partnerships with institutional market-making partners to enable a powerful and liquid exchange.

"The U.S. bettor will finally have a transparent, open market of sports betting wagers to trade, and we couldn't be more excited to be a partner."

Among the advantages being touted by Sporttrade regarding its approach to sports wagering is the relative immediacy it will provide in bettors being able to cash out of a wagering position while an event is in progress.

’The Same Way They Trade Stocks’

According to the company’s news release, Sporttrade’s “open betting marketplace allows participants to trade sporting events the same way they trade stocks, with tighter spreads, more liquidity, and unique features like ‘always on’ in-play trading, and the ability to trade in and out of bets at any time.”

This type of trading in events has been part of the wagering landscape elsewhere globally but is unusual for America. Among challenges faced by Sporttrade will be educating U.S. bettors about the concept and competing for customers with the traditional online sportsbooks who are fiercely pursuing market share with generous promotional giveaways.

Delavan Lake Investments, co-founded by David Frohardt-Lane and Brandon Moran, also participated in the funding round.

"When we first met with Alex in 2019, he had a vision to transform the existing sports gambling model and leverage the benefits of stock market investing for the recreational sports trader,” Frohardt-Lane said. “His drive to apply financial markets principles to benefit the customer was the primary reason we knew he was the right person to partner with in this revolutionary venture."

Betting News Articles

DISCLAIMER: Online Wagering is illegal in some Jurisdictions. It is your responsibility to check your local regulations before playing online. GDC Media Ltd takes no responsibility for your actions.
© 2011-2021 GDC Media America Inc. All rights reserved. Registered with the New Jersey Division of Gaming Enforcement with Vendor ID #90927.
Terms and Conditions  |   Privacy Policy

Asset 4 Android GET IT ON facebook Download_on_the_App_Store_Badge_US-UK_RGB_blk_4SVG_092917 twitter
×