America is not just the home of the free – it’s also the home of the free market. Could there be any greater symbol of the free market than the New York Stock Exchange? Now focus on the key word there: Exchange. Because without exchanges, there could be no such thing as a free market economy. But for centuries, one multi-billion dollar industry never had an exchange worthy of the name. That’s right – the wagering industry.
Times are changing, but the evolution has been incredibly slow.
In 1792, 24 prominent New York businessmen met under a buttonwood tree on Wall Street and decided to trade securities. Trading took place at the Tontine Coffee-House in a call market. In 1817, the Tontine gave way to the New York Stock and Exchange Board.
In 2002, 210 years after the New York businessmen started trading three government bonds and two bank stocks, TradeSports was established. It was based on precisely the same principles as the New York Stock Exchange: buyers and sellers meeting in a marketplace. The idea was to make money by buying low and selling high. Only instead of trading bonds and stocks, members traded sports. Would the Cubs beat the Red Sox? Buyers said yes, sellers said no.
It is of course true that sports fans have been having a financial interest in games for as long as anyone can remember. But always, that interest was facilitated by a bookmaker. And the way a bookmaker goes about his business is the antithesis of the free market.
The bookie says: ‘The price on the Giants is this – take it or leave it.’ He makes odds with one thing in mind: his own profit. Inbuilt in those odds is what they call a vig. You might also call it a BRF: the Bookies’ Retirement Fund. The odds are stacked in his favor. That’s why you never hear of anybody, anywhere being described as ‘the billionaire bettor’.Now billionaire traders – they are a more familiar breed.
Why is TradeSports, the first genuine sports exchange in the US, better than betting with a bookie? Because only with an exchange can you get fair odds. That’s because TradeSports doesn’t make money if you lose money. By taking the bookie out of the equation, TradeSports allows its members to trade vig free by paying a $0.04 transaction fee.
All the information you need to trade is right there on your screen. You can see the volumes and the prices, as well as the next best prices.
You can wait to see how a game is shaping up before entering the marketplace. If you suddenly become convinced that the Redskins are going to come back from being 15-0 down, you can buy them there and then.
Right at that point, there will be traders who can see no way back for Washington. You think one thing, another guy thinks the opposite. The exchange allows both of you to put your money where your mouths are – without contributing to the BRF. Hey, you can even become a bookie yourself. You don’t have to factor in a vig so you can offer other members better value that they could get with a conventional bookie. You could win, or you could lose. But the point is – at least you are operating on a level playing field. In many ways, sports trading is the same as trading cotton or any other commodity – you need skill and judgment to make money.
TradeSports – the first genuine exchange for sports wagering out there. It has taken a long time. But its time has come.