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Wagyr - Would a Peer to Peer Sports Betting Site Work?

I don’t currently bet on sports. I joined Draft Kings but quickly got overwhelmed with the high amount of maintenance required to set up your team and keeping track of bye weeks and injuries. I definitely don’t want to place bets with a mob bookie who is going to break my legs if I don’t pay up, nor do I want to travel to a state licensed establishment to place a bet. There is no current market leader for placing sports bets online in the public’s mindspace at the moment. I believe that due to the recent favorable Supreme Court ruling there is an enormous market opportunity for a peer to peer betting site that either friends or strangers can use so that they can place sports bets with confidence.

So how would a peer to peer sports bet site operate? Kind of like the financial options market. There is a football game where between the Giants and the Cowboys. The Giants are favored by 4 points, and site offers it as a game you can bet on. Someone takes the Giants to win. The bet is not complete until someone else takes the opposite side. Both parties are putting their own money, the site does not in itself do payouts drawn from its own cash holdings like a traditional bookie would. There is no vig. The site takes a small flat fee from the winner.

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Robert Lancer
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Chief Technology Officer at Collaborizm
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There are actually a lot of sports betting sites on the net which are run offshore. In my opinion this opens the door for more in person betting, potentially bars and restaurants will be able to offer sports betting as part of their offering.

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Steven Reubenstone
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Mechanical Engineer & Tinkerer of Things. Collaborizm Roundtable.
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interesting concept let me think on this

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Steven Lance Rocker
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Journalist, Project Manager, @ The New York Times.
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If he could make some tweaks to his operation, he could get ahead of those who will come offshore. He could take some of the laboriousness out of a process that should just plain be fun.

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Robert, that’s an interesting thought. What if I created an API that allowed sports bars to have dynamic betting? That would help draw in paying customers and increase interest in the game.

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Steven Lance Rocker
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Journalist, Project Manager, @ The New York Times.
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People could use their phones while their in the bars drinking beer… Sounds like something I would do, especially when you watch the game… Who’s watching the N.B.A. Finals? I lost a bet $20 with a colleague that Labron would go down in game 7. Maybe you could make it more social so that people can bet with their friends perhaps using geo-technology.

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Entrepreneur (Project Leader)
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I got a great reply from a redditor in the r/startup_ideas subreddit.

Roadblocks:

You still cannot offer wagering unless you obtain a gaming license. Providing a peer to peer service that you charge money to facilitate is the same as offering gaming. Your only hope would be to take no money. But even then, see below.

Once states pass specific laws permitting sports wagering, big mind-space companies like Caesars, MGM, etc will enter that space with millions of dollars in marketing muscle.

If current poker and casino legalization is any indication of what will happen with sports wagering, even applying for a license will cost millions. Pennsylvania is charging $4 million each for online slots, online table game (i.e. black jack), and online poker licenses (i.e. $12 million total, but PA has been kind enough to offer a discount to $10 million if you take all three).

Nobody that pays these licensing fees or has to operate under stiff gaming regulatory oversight is going to take kindly to your product in their market and will lobby at the highest levels for state or DOJ enforcement.

Similar to the above, gaming typically has a special tax rate applied to wagers. A casino pays tax on GROSS revenue. Some states are talking about taxing on handle (amount wagered) for sports betting. The amount you owe in taxes could be more than you collected in fees.

NBA, MLB, and NFL are trying to muscle in and force potential sports betting platforms to pay an integrity fee (to make sure the games are fair - really just a cash grab). Presumably, your app would also have to pay an integrity fee to the major sports leagues.

Virtual currency does not solve the problem. If the virtual currency can be exchanged for anything of value then it is wagering.

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