If you’re into sports betting, you’ve probably heard of the big players like DraftKings, FanDuel, William Hill, Penn National, and the like. But what about Smarkets? No? Well, that’s because the UK-based company is only just beginning its entry into the U.S. market.
Founded by former UBS trader Jason Trost, the company is based in London, where it offers peer-to-peer betting and trading on everything from sports to politics. That model won’t be in the U.S., but the company made its American debut Thursday with the launch of its Colorado SBK Sportsbook app, making Smarkets the seventh app to go live since legal sports betting started in the state on May 1.
“Colorado will be our first entry into the American market. It’s the perfect state for us to compete by showing Americans the existing bookmakers do not offer good odds,” Trost told COBets.com via Twitter. “We’re excited to bring substantial competition to shake up the market.”
Social network key to Smarkets’ success
Smarkets can’t offer political bets in Colorado, but if it could, Coloradans would have seen this week that Joe Biden opened his biggest lead over sitting President Donald Trump as the favorite to win the 2020 presidential election. The company will stick to sports and a more traditional sports betting model, offering odds on college and professional sports.
Joe Biden is now trading at his shortest-ever price in our market on who will win November's US Election.
— Smarkets (@smarkets) June 3, 2020
The company soft-launched earlier this week with its SBK Sportsbook model, with plans for a bigger blowout when the major professional sports resume — all have been on hiatus in the U.S. since mid-March due to the COVID-19 crisis.
In Europe, Smarkets uses an exchange system to set odds, but in the U.S. the system will be more of a traditional sports betting model in an effort to draw a more casual bettor and stay in line with local law. Launched in August 2019, Smarkets touts its SBK Sportsbook as having “industry disrupting odds, and a sleek social experience.”
A key piece of the app is a social networking platform that resembles Instagram and is available for bettors to make comments, share their bets, or leave tips for other bettors.
Prospective bettors can download the app at the App Store for Apple products or via getSBK.com for Android.
Smarkets is its own oddsmaker
Much like BetMonarch, which launched in mid-May, Smarkets runs its own book, meaning it doesn’t contract with an outside oddsmaker. By definition, Smarkets can be more nimble when it comes to in-game betting.
“We develop all of our core technology in-house, so we’re not relying on third-party B2B providers like many others in the industry,” Pascal Lemesre, public relations manager for Smarkets, told CoBets via e-mail. “This means our products look and feel different, and we can respond to customer feedback quicker. We believe this approach — in a marketplace dominated by a select few companies, coupled with our focus on providing the best odds, will set us apart from the competition.”
Smarkets’ unique betting exchange gives bettors the option to predict that certain events will not happen. For instance, if you are confident that the Lakers won’t win the NBA championship, you can sell a contract on the exchange. Smarkets will then match buyers and sellers just like other vertical marketplaces such as AirBNB. Think of the exchange as an options market for sports wagering. In essence, you are placing a wager with a counterparty on if the Lakers will capture the title.
As of June 4, there were more contracts on the Lakers’ title chances (last traded price of 3.75-to-1) than any other team in the league.
Colorado sports betting regulations define an exchange wager as a “form of wagering in which two or more persons place identically opposing wagers in a given market, allowing patrons to wager on both winning and non-winning
outcomes in the same event.” The Colorado Division of Gaming has also published regulations on tax requirements for operators that offer exchange wagering.
Prior to accepting exchange wagers a sports betting operation must obtain approval from the
Commission. The Commission rates taken on such bets must be approved by the Director and
are subject to all taxes and tax requirements as are paid on net sports betting proceeds. —Colorado Sports Betting Regulations, Section 7.7 (17)
Smarkets has offices in London, Malta, and Los Angeles. It plans to expand its U.S. footprint beyond Colorado. Smarkets currently operates in the U.K. and recently got approval to expand into Sweden.
— FortuneZ (@FortuneZinsider) April 20, 2020
In the U.S., the company has a partnership with Full House Resorts, which also gives it market access in Indiana. Smarkets is looking to launch there in “the near future.”
“We are hopeful that this is the first of many U.S. states (in which) we are able to introduce our platform,” Lemesre said. “Since PASPA was repealed two years ago, Colorado is definitely one of the more straightforward states to have gone live from an operator point of view, and this should also mean better products and competition for Coloradans. Right now, it’s difficult with most major professional sports suspended.”
Smarkets is a digital-only platform and won’t have retail space in Colorado. It will be one of more than 20 digital sportsbooks operating in a state that has 33 retail casinos (all shuttered since mid-March) and a healthy appetite for sports.
Denver is home to teams in each of the U.S. major professional sports — the NFL Broncos, Major League Baseball Rockies, NBA Nuggets, and NHL Avalanche — making the state attractive from an operator’s standpoint.