PropSwap will forever be tied to the story of Scott Berry, the St. Louis Blues fan who turned a whimsical $400 decision into a national headline. Berry placed a $400 bet on the last place Blues to win the 2019 NHL Stanley Cup. Shortly thereafter, the team took form and, after a 4-3 series win over the Boston Bruins, Berry walked away with $100,000.
PropSwap – an online marketplace that allows sports bettors to buy and sell wagers – fielded numerous requests for Berry’s ticket. Prices ranged from $12,000 to $40,000, but Berry shot them all down. But the ability to make 30x – 100x profit without worrying about the outcome can’t be ignored, and therein lies the uniqueness of PropSwap’s platform.
eBay for Sports Bettors
PropSwap benefits bettors by creating a secondary market that allows buyers to submit bids on tickets listed for sale. The market only carries tickets resulting from wagers legally placed with state-licensed sportsbooks and serves as a go-between for buyers and sellers. PropSwap does not set prices, offer odds, or accept bets or wagers and, because the bet occurs prior to listing, does not engage in the business of betting or wagering. Additionally, PropSwap never takes ownership of a ticket. As a result, the platform provides bailee services and is considered a “common carrier” under state and federal law – for a 10% fee, the company will valet a purchased ticket until the conclusion of the event.
Buyers must be located in the following states: (1) Connecticut; (2) Illinois; (3) Indiana; (4) Kentucky; (5) Massachusetts; (6) Mississippi; (7) Nevada: (8) New Jersey; (9) New York; (10) Ohio; (11) Pennsylvania; and (12) West Virginia. Noticeably, four of these states – Connecticut, Kentucky, Massachusetts, and Ohio – have not legalized sports betting. Because customers are selling legally purchased property, they also are not considered engaged in the business of betting or wagering. Once a ticket is purchased, it is the bettor’s right to do with it as he or she wishes. However, PropSwap’s reach is limited only to the states that have approved its platform.
Looking into the Future
PropSwap works with each state’s gaming commission to make sure they are comfortable with its service. States that allow PropSwap but have not legalized sports betting provide a window into the state’s future plans. With the repeal of PASPA, sports betting has been decriminalized at the federal level, and states are eager to get in on the action. As each state opens up gambling to its residents, PropSwap will be able to capitalize on the market based on the establishment of its brand and goodwill in other jurisdictions. Until then, PropSwap continues to form its footprint with a measured approach.
Over 99% of available tickets are “futures bets” that take weeks or even months to complete. While this gives buyers time to analyze the worth of their decision, the arrival of “live betting” presents an additional frontier that the secondary market may wish to pursue. However, this presents a drastic shift from the current business model and may subject carriers to the gambling laws they seek to avoid. If buyers continue to set prices for purchased tickets, then this shouldn’t be an issue. But vastly shortened timeframes may limit the efficacy of the service.
Secondary markets could address this issue by setting its own prices through an internal algorithm that constantly changes the value of a ticket once listed for sale. However, that toes the bookmaking line. One-push notifications that offer updated pricing but leave the choice with the seller is a possible solution. This idea will only work so long as the operator is not accepting bets or wagers and maintains its position as a bailee.
The future of secondary markets is filled with untapped potential. As times change, PropSwap and other secondary markets will play huge roles in the recharacterization of gambling as smart sports investments.