The competition is warming up for US sports betting exchanges, notably in NJ.
New Jersey-based exchange Prophet announced Monday it would be launching in NJ sports betting this football season.
‘Simplicity’ key for Prophet
“We are delighted to announce our agreement with Caesars which will see Prophet launch for the 2021 football season,” said Prophet CEO Dean Sisun. “Prophet is going to be the sports betting exchange of choice because of its simplicity and focus on sports betting principles.”
Sisun said customers would get better odds than at a sportsbook and would not be limited.
Bettors also will be able to offer their own prices for games in the hopes of being matched by another customer.
Who is Prophet?
Prophet was founded in 2018 and initially licensed in the UK. It branded itself as a place to buy and sell existing wagers, akin to PropSwap.
However, it will act more like a traditional betting exchange in the US.
Prophet will offer an API for serious clients, as well as web and app products.
Exchange competition warming in NJ sports betting
The company is now the second betting exchange aiming to launch in New Jersey this year, after Sporttrade.
Both pledge to reduce vig for customers but both face similar challenges, starting with liquidity.
The Wire Act means liquidity must come from within the state. That could get more challenging with more exchanges as liquidity and customers get fragmented between them.
Exchanges a double-edged sword?
In the UK, exchanges account for around 10% of the sports betting market, although they have never grown the way some expected due to the complexity of the core product.
Exchanges can also damage the wider sports betting ecosystem. For example, they allow people a simple way to lock in profits from matched betting or bonus abuse.
As a result, sportsbooks have responded by reducing their bonuses in other markets.