WagerWire Vs. PropSwap & The Idea Of Trading Sports Betting Futures
The sale of the Brock Purdy MVP ticket on PropSwap was a major story in the sports betting world during the NFL Season. Other companies, like WagerWire, exist to provide the wager trading option through online operators. How do these companies and their wager trading methods compare? How will wager trading as an option affect the sports betting industry going forward?
TheLines.com spoke with WagerWire CEO Zach Doctor on these topics. He discussed how companies like his are aiming to change how bettors treat their futures tickets after placing a wager.
Digital Vs. Physical Wager Trading Compared
PropSwap offers bettors the opportunity to auction and sell their wager tickets and charge a 10% commission on sales. The process involves bettors placing their wager from a regulated sportsbook for sale via PropSwap. When a sale is confirmed, the seller must mail the ticket to PropSwap. The company will verify the ticket, and then send the ticket to the buyer after payment.
With WagerWire, the entire sale and purchase process is done digitally at the sportsbook. WagerWire is currently active via Real Time Fantasy, where fans will see a tab for trading picks. The picks are made via the operator and bettors hold the ticket in their digital library. The ticket can then be placed for auction in a public forum. Other users can then bid on and purchase those publicly available tickets. The trades are done instantly and both buyer and seller receive their ticket/payment in moments. WagerWire also charges a 10% commission on sales.
Pros And Cons
With PropSwap, bettors are able to trade tickets from any regulated retail sportsbook. However, their hands would be tied if that same wager was placed on a digital platform. That problem is what WagerWire is aiming to solve.
“I think they were lucky enough that it was a paper ticket that they were able to use PropSwap,” said Zach Doctor when discussing the $100,000 Brock Purdy ticket. “But if this was an online bet in his FanDuel account or something like that, then they wouldn’t really have a solution for it. And then it just pointed out the obvious need for this, to be able to sell your bet at a fair price. Because right now, your options are pretty tough, right?”
However, with WagerWire, bettors are limited to operators that are partnered with WagerWire for sales. Bettors can trade a retail ticket from any regulated book regardless of partnerships with PropSwap.
Why ticket trading companies like Wagerwire and Propswap matter
In most cases, bettors do not have many options for a ticket like this. Online, oftentimes, there are cash-out options. But those don’t always pay what a bettor thinks is a fair price, motivating players to just let the ticket ride.
With retail tickets, there are no early cashout options. A hedge on your bet on the other side is also an option. However, for massive payouts, most bettors don’t always have access to enough funds to hedge.
“If you have a bet like that, it’s tricky with a season award bet in particular because how are you going to hedge that? You’re gonna put 25 grand on the four other people?…. So you don’t know what to do with that. Good if it’s a paper ticket, and you know sportsbooks have also been rolling out this cash-out feature….they offer you a buy-out price. But those are often terrible prices, too. So, you’re kind of stuck between a rock and a hard place as a bettor with a ticket like this.”Zach Doctor, WagerWire CEO
These limitations placed on tickets are a part of sports betting. When gambling, there is always the risk of losing. Sportsbooks do not owe bettors anything after the ticket is placed. However, the added option to make tickets more flexible for bettors can be a game changer. Zach Doctor explains: “A lot of people just ride a ticket like this to zero because they don’t know what to do or they’re not liquid.” For this reason, the WagerWire CEO believes that the next step in the sports betting industry is the trend of wager trading.
“What’s the next kind of new frontier for betting? And I truly think this secondary market concept can be that.”
Potential Barriers With Joining The Market
WagerWire has recently curated partnerships with Betr Picks and Real Time Fantasy. The company is aiming to slowly gain partnerships with big operators like DraftKings, Caesars, and FanDuel. But what potential hurdles stand in their way?
“Really, the opportunity and the challenge are kind of one and the same here for us. So, we have to partner with the sportsbooks. That’s the way to really properly do this with online tickets and to do it in real-time settlements and transfers where I buy your bet, and it literally shows up in my betting account, and then if it wins, I get paid out.”
“We’re going right up to the books and trying to talk to them and trying to close them as partners. But, that means we have to navigate B2B sales and enterprise sales process….But I think you know we have the vision that this is really the only way to do it properly at scale is to get the books involved.”
How Do Regulators Feel about Wager Selling?
WagerWire has also gained its Gaming Laboratories International (GLI) certification in Q4 and has been working closely with regulators. We asked how regulators feel about the WagerWire business practice.
“So it’s been very encouraging from the standpoint that…they view this as a protection of the consumer. You should have the ability to get out of a bet if you have to. With our system, you can sell some of that or all of it. We’re just giving a little more optionality to them. At the same time, regulators are very concerned with compliance and meeting all the regulatory requirements in their state.”
“Having the dialogue with them has been very helpful because now we’ve been baking that all in. And we’ve actually built into our system the way to do all these checks in a compliant manner to make sure the buyers are in the state and are being geotagged. It’s complicated in a sense, and every state has got their own regulations and everything, but that’s really what WagerWire’s here to solve.”
“From talking with them, it’s been very positive.”
In time, we’ll see if trading bets within sportsbook apps become the next new feature of American online sports betting.
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