When Prophet Exchange launched in New Jersey in August last year, it did so under an exciting promise: becoming the first sports betting exchange to legally establish itself in the United States. Almost eight months later, and after completing its first football season as a business, the platform is reaping the benefits of its pioneering move. Over $1 million in matched bets on Super Bowl LVII mark the biggest day for the company yet and work as proof of the growing excitement that surrounds its business proposal.
As a peer-to-peer exchange, Prophet Exchange allows users to set their own prices for others to bet on or place bets on the prices already available. Users pick any game and spread they want and offer a bet, which is posted onto the exchange platform. In order for the bet to be active, another bettor must take the inverse of the bet. As opposed to a traditional sportsbook experience, where bettors are given a listed price, an exchange provides users more freedom over their wagering.
While this year’s big game has already provided a clear picture of Prophet’s potential to disrupt the sports betting ecosystem, the future looks even more exciting. “The next handful of months leading up to the NFL season are going to see some big changes to the product as a result of user behavior beforehand,” Dean Sisun, Co-Founder & CEO of Prophet Exchange, tells Yogonet in an exclusive interview.
Prophet Exchange reported its biggest day during Super Bowl LVII, with over $1 million in matched bets on its platform. What does this achievement represent for the company?
This was a beautiful case study of how powerful the exchange can be. With many users focused on one event, Prophet’s betting lines often had one-cent straddles on the moneyline on that Sunday. Additionally, there was a lot of popularity betting on the “no” side of touchdown scorers – something that sportsbooks do not offer. Between the unique bet types and the unique betting experience of the exchange, the popularity spoke for itself.
In addition to betting “no” on touchdown scorers and requesting prices on outcomes, the coin toss at even odds was something that was very intriguing to people. Additionally, users are able to trade in and out of their positions as well at tighter prices than sportsbooks’ cashout function, something which is appealing to users.
The sports betting exchange is only seven months old. What are your impressions of this first season in business? Could you provide us with some insights on how demand for the exchange’s proposition and user acquisition are advancing?
Prophet launched with a truly minimum viable product in August and we have been operating this way since. The demand has been around better prices and the ability to request your own price on betting outcomes.
However, we have gotten a lot of feedback in this time period, and as a result, the next handful of months leading up to the NFL season are going to see some big changes to the product as a result of user behavior beforehand. “Smart wallet” functionality, allowing users to bet in and out of positions without large upfront capital requirements, will be coming in that time period, as well as additional deposit methods, bet types, and deeper liquidity.
User acquisition is something we knew would always be a challenge. The easy part is retention, as once a customer joins and understands the platform, they stick around at an impressive rate. The biggest issue we face right now is getting people to understand the platform without intimidating them.
Our vision is to build the people’s exchange – a place where everyone, no matter what type of bettor you are, can enjoy their experience. An exchange is naturally a bit more difficult for folks to understand since it is a brand-new product and has an extra layer of complexity to it. As we figure out our messaging and education more, acquisition gets easier.
What would you say the current sports betting industry is lacking? Where do you see the market headed and how does Prophet Exchange’s proposition adapt to this context?
Variety. Every prominent operator has the same product. There will be differentiated platforms that come in and provide users with a betting experience with mass appeal that is not a sportsbook. This is where we see ourselves sliding in.
Additionally, props have been getting increasingly more interest, so I expect those lines to get sharper and books to start taking more action on them. We would like to play in this space as well, but not before we nail the main markets.
Do you see US bettors as increasingly interested in exploring exchanges, or are they still too used to regular sportsbooks? And as for Prophet in particular, is an expansion to new states in the roadmap?
Expansion to new states is not on the roadmap until we nail our product in NJ. We have a lot to do before we think about moving to other states. Additionally, the market is starting to come back toward the buyers for skins, which gives us even more incentive to wait.
US bettors are definitely still more interested in their sportsbooks at the moment – our product is not far enough along yet where the masses will be more interested in us than a company like FanDuel. As we develop, however, this will drastically change. I expect the exchange to be a staple in the ecosystem for all types of bettors as we build out our product.