Peer-to-Peer Sports Betting Marketplace ‘Prophet Exchange’ Launches in New Jersey
A new peer-to-peer betting exchange is wagering that users are willing to stray away from traditional sportsbooks in the name of giving up less of a cut.
Prophet Exchange, the brainchild of a former investment banker Dean Sisun and former financial consultant Jake Benzaquen, is a market maker whose app debuted this week in New Jersey.
The idea is akin to betting exchanges in the United Kingdom, which allow bettors to wager against other users. You set your own line — let's say you want the Mets tonight at +150 for $100 — and other bettors are able to take on the risk for that line at-will.
Prophet only takes a cut when a bettor profits, in which case, the company takes a 2% piece. Vig at traditional sportsbooks, for instance, is 10%.
The question remains: Can Prophet profit?
It's not an easy path to success.
One of the reasons why peer-to-peer is so successful in Europe is that the base customer is a lot more interested in the best possible price.
America hasn't really shown much aversion to the juice or the odds. For the majority of US bettors, price shopping takes a backseat to brand, ease-of-use and customer service.
The second issue will be liquidity. It's early, but if decent markets can't be made immediately, people will turn off immediately.
Prophet Exchange hasn't spent a dime on marketing but still says about 300 bettors are already using it.
Gambling insiders argue that whatever isn't spent on marketing will have to be spent on user education.
If the casual fan doesn't understand odds to begin with, they surely won't peer-to-peer bet, seeing as the service is even less intuitive.
Aside from the New Jersey skin, Prophet Exchange has a plan for Indiana and is looking to move into additional states to build up customer base and liquidity.