Sports betting app Tradesports, beginning with a free-to-play beta launch before a scheduled real-money launch in 2020, will return to the US market on 8 December.
The company, founded by former commodity trader Ron Bernstein, was launched in 2003 for the first time, initially based in Ireland, but closed in 2008.
Tradesports relaunched in April 2014 as a fantasy gaming company under the 2006 Unlawful Internet Gambling Act, which was legal in the US. It closed in November 2015 again, though.
On the relaunched exchange, players will be able to trade shares based on the likelihood of certain outcomes occurring. The return of the exchange to the US market will come after an initial beta tournament, in which weekly contests will be held where each tournament participant will start with a virtual currency bankroll of $5,000 and the player with the most wins at the end of the contest wi
The market for an outcome that occurs will be settled at $100 during the beta tournament, and the market for an outcome that won’t be settled at $0.
Due to laws regulating social gaming, this competition will not be eligible in Washington State.
Tradesports plans to launch a real-money exchange in 2020 after the beta tournament is completed. For the transfer of real money, pools will be divided by state due to issues related to the Wire Act. A company spokesman toldiGB North America that they wanted to see new federal sports betting legislation that would allow national trade pools.
“We’re not going to be able to pool liquidity between states once we open Tradesports for real money trading,” the spokesman said. “This will lead to ineffective silos.
“We are in favor of federal sports betting regulations even if a federal tax can be applied. We believe that an overlay by the federal government will further open the market and exponentially increase volumes.
“States are likely to gain additional revenue; as sports betting activities continue to grow online and on phone, new geo-tracking technology will ensure that each player in each state collects appropriate state taxes. Of course, we realize that federal oversight of sports betting will take time, but we believe it’s a logical conclusion and will ultimately drive better value for players.”The take-up of exchange betting in the U.S. has been low at the moment. However, the spokesperson for Tradesports said it believed that exchange betting would be more sustainable in the long run than fixed-odds bookmaking, due to the fact that the operator’s margins are guaranteed.
“Since the removal of PASPA, there has been a major land grab as sports betting companies stake out territories as fast as possible,” the spokesperson said. “Until now, the easiest go – to-market strategy has been to leverage traditional fixed odds betting, offering margins of up to 8%. That’s an enticing prospect, but it’s built on the assumption that it won’t last long-term.
“As the market is increasingly crowded, in order to compete, operators will need to lower their margins. Tradesports, on the other hand, plans to offer lower margins (probably 3-4%) from the jump; this is possible because we are a peer-to-peer exchange, so we don’t need to defend against a’ bad beat.’