Sporttrade, the exchange-wagering platform that brings a stock market-style approach to sports betting, got its second license Thursday when the Colorado Limited Gaming Control Commission approved the company for a First Temporary Sports Betting Internet Operator License.
The company will launch an offering similar to its innovative platform, but bettors won’t be able to place limit orders or choose their price. Rather, like traditional sportsbooks, bettors will be playing against the house rather than each other.
The platform is not yet live in Colorado, and Sporttrade has not shared when it will launch.
Sporttrade has been live in New Jersey with its exchange-wagering platform since September 2022. The company patterns its exchange-wagering offerings after stock-trading company Robinhood and allows bettors to buy and sell positions. It makes money by taking a 2% vig on every trade.
Sporttrade is also pursuing licenses in other states, including Louisiana.
In Colorado, Sporttrade will join more than 20 other wagering platforms in a state considered by stakeholders to be one of the most open, competitive available.
Why LGCC hasn’t approved exchange wagering
The law in Colorado does allow for exchange wagering, and in June the LGCC began considering rules that are specific to exchange wagering. But due to concerns around “external market makers,” the commission opted to table approving proposed rules.
A good sports betting UX isn’t just measured in the way an app looks, but also how quick the bets can go through in crunch-time, the liquidity available, the uptime, and the price.
While there’s still much improve, I’m so proud of what we currently offer. pic.twitter.com/rdVbogLP5K
— Alex Kane (@a_kane47) August 23, 2023
In the proposed regulations, an external market maker is defined as “an entity or authorized person with the State of Colorado, other than an individual acting in their personal name within the State of Colorado, that has funds on deposit with an internet sports betting operator or sports betting operator by placing wagers, and buying and selling wagers on the exchange.”
Commissioners were concerned about how external market makers would be taxed, what level of licensure would be required, and what entities could qualify as external market makers.
In other news from the LGCC meeting, the commission approved a First Vendor Major License for Amelco, the company that crafted the source code that the new Fanatics Sportsbook platform is based on, and reissued a Temporary Sports Betting Internet Operator License for Bally Bet.
