Your sports bet may soon be more than just a bet. If a secondary swaps market is allowed in New York, your bet could be an asset to sell or cash in for guaranteed profits.
WagerWire is a marketplace that allows bettors to buy and sell their previously placed sports bets. Currently, no regulation in New York explicitly allows sports betting swaps, but WagerWire wants to change that.
In an interview with Zach Doctor, cofounder and CEO of WagerWire, NY Sports Day learned that secondary swaps markets might be the next big thing in New York sports betting. With 31 states having legalized sportsbooks in some form, a huge, growing market is ripe for new products.
WagerWire has a technology module that offers swaps and secondary market features to a sportsbook.
“This is a great tool for the sports bettor, to provide hedging strategies,” Doctor says. “[A swaps market] creates a larger pie for everyone.”
Explaining NY sports betting swaps
In a swaps market, consumers can swap, sell, or buy assets like bets. For example, suppose you have a four-leg parlay where two of the legs have already hit. You could sell shares in the possible payout of that bet should it win. There are several types of swaps possibilities in what is often referred to as a secondary market.
A secondary market is a marketplace that enables the owners of the bets to connect with people who want to buy into that bet, or possibly even purchase the entire bet. Why would someone want to buy your sports wager? Maybe you got excellent odds on a sporting event that aren’t available any more. Or, possibly, the outlook of a game has changed.
You can sell all or part of your bet to customers on a secondary market. In that way, you are guaranteed some money from the investors who are now sharing some of your risk. Of course, you’ll also have to share profits if the bet wins.
“This allows you to bank your bet and sell your bet at an attractive price,” Doctor says. A sharp bettor may realize that making 75% on his stake is better than risking it all to win 100%.
WagerWire sees a future where sports bettors can place micro-bets as a way to buy a wager as an asset. In micro-betting, the consumer can purchase part of a bet, or several bets, even hedging on the same competition. While some of the micro-bets may not pay off, if enough do, you earn a profit. Or possibly create a portfolio that attracts investors.
What is a cash out?
Some sportsbooks, like SuperBook, have started to toy with a type of secondary market: The cash out. With that option available, it could shift some of the advantage to the sports bettor.
In a cash out, the sportsbook buys back your bet for a “cash out” price. Think of “Deal Or No Deal.” The “banker” makes an offer to buy the briefcase, which could contain loads of prize money.
A sportsbook may offer a cash out price for a bet you made that looks like it has a decent chance of winning. That way, the sportsbook loses less money than if you wait and continue with risk, while you get a guaranteed sum instead of possibly losing everything.
Currently, however, as Doctor points out, the “house” has a strong incentive to offer a cash out.
“They have a captive audience,” Doctor told NY Sports Day, “and they count on you deciding to cash out for 65 to 70 cents on the dollar. [The] sharper audience who knows betting, they already know cash out is not a good value.”
The value of bets: Knowledge is good
WagerWire hopes to be able to announce a partnership with a major U.S. sportsbook later this year. Their platform would plug into an online sportsbook and offer a slew of features.
With the swaps functionality from WagerWire, customers could sync their favorite NY sports betting apps to track the real-time value of their bets, stack rewards, and play with celebrities or friends.
“With a secondary marketplace like WagerWire’s, bets are now a portfolio of assets that can be bought and sold at anytime. We make it easy with suggested prices and deal scores,” Doctor says.
In the future, sports bettors may look at the “value” of NY sports betting odds in their current state rather than what they laid out. Like stocks, the bets have values that ebb and flow. This is especially true for multi-game parlays and futures markets, but can also apply to other bets because of the ability to pivot in real-time with live betting.
Doctor says he could see a future where a sports betting app has a cash out price next to all of your bets, and even a ticker rolling to show the value of your portfolio of wagers.
How swaps markets could help NY sports bettors
A swaps market adds features that make apps more attractive and add more functionality. Managing, selling and cashing out bets puts a lot of power into the hands of the consumer.
“We’ve seen that regulators like this concept,” Doctor says.
But sportsbooks could see other benefits, too. A bettor may place a bigger bet if they know they can get out of it later through a sale or cash-out. Or they may make a larger parlay if they know they can cash it in if the first three legs hit.
WagerWire, which is required to be registered with state regulators, is planning a mobile app rollout for 2023. The app will offer a “free to play” betting platform that incorporates the swaps markets that the company is known for. A version of the app can also fold inside a sportsbook once partnerships are established.
The app will have many of the features you could become familiar with in every sportsbook in the near future.
“We put deal scores on every bet, so you can see what the value of the bet may be,” Doctor explains.
Some caution is understandable
If swaps markets for sports bets sounds a little like secondary housing markets or even crypto banking swap funds, Doctor understands the caution. But he thinks a secondary market, which could also offer micro-betting to sports wagerers, is good for the industry.
“People growing up on RobinHood and stock market apps, it’s intuitive for them, its a day trader mentality,” Doctor says. “I don’t have to be right about this bet, I just have to predict [a team or athlete] will do well enough during the season that I can flip [my bet.]”
Doctor points out that sportsbooks could and should reveal the odds on a bet in progress, so consumers see their chances, and can make educated decisions about selling it, cashing out, or splitting the bet.
“Transparency is good for everyone in the long run,” Doctor says.
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