July 18, 2024 • 49 mins
Sean Brace & Evan Davis sit down with Alex Kane, Founder & CEO of Sporttrade for episode 2. Press play & hear all things discussion on Alex's background, his career trajectory, and what inspired the creation of Sporttrade.
Key Topics Discussed:
Key Topics Discussed:
- Concept and Vision
- Insights into the tech and data supporting Sporttrade
- How to move in the Regulatory landscape
- Expansion plans in the near future
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
You are listening to Behind the Vague, a podcast mini series that takes you
beyond the bets and strategies and moreinto the business of the sports betting industry.
Now Here are your hosts, SeanBrace and Evan Davis. That is
correct. I am Sean Brace.He is Evan Davis. This is episode
(00:21):
two Behind the Vague, and folks, we got ourselves a good one.
Evan, I am looking forward toour discussion this afternoon. This is a
bright young man and one heck ofa Philadelphia sports fan. Yeah, I
can't wait. We've got Alex Kine, CEO and founder of sport Trade.
And for those who don't know,sport Trade is a sports betting operator that's
(00:44):
live in three states right now,possibly more to come, but definitely a
different model than what you see onpretty much everyone else. And we're looking
forward to having Alex tell us aboutit and learning more about how we got
to where he is. All right, let's go, here we go,
Let's not wait spending more time Behindthe Vegue Episode two with Alex Kane.
All right, Episode two Behind theVeig. You already know who the hosts
(01:07):
are. My name is Sean Brace, of course, Evan Davis. No
need for the introduction. You justheard us rant and ray for the last
couple of minutes. But folks,we are excited to have our guest number
two in studio with us. Andthis gentleman has a lot going on,
and of course we can even tiptoearound the world of Philadelphia sports as he
is a Sixer slash Philadelphia sports fanand it was a has been a busy
(01:30):
offseason for the Philadelphia seventy six ers, so I'm excited to hear a little
bit more about his thoughts on allthings six Ers, Philadelphia sports. But
he's here to talk about his babyand at his sport Trade. It's the
app you can check those guys outat on socials at sports Trade, sport
Trade Underscore app, and it isthe CEO and founder of Sports Trade,
(01:53):
Alex Kine. I keep wanting toput the s on Alex. I apologize
sport Trade sir. Hello, Sohow we doing, Alex? Are you
guys doing? Congrats and the launchof this thing. When Evan told me
about this, I said, Igotta do. I gotta be in studio
with you guys. Mom man,that's what we like to hear. Alex
excellent. Great to have you didI get that right? Philadelphia sports fan,
(02:13):
I know the Sixers fan. Isaw a couple of videos you repping
the T shirt you were on withBoston versus the book. Those are my
guys, Matt Prout and Dave andyou were repping the Sixers loud and proud
there and that's a good thing asthey're Boston. Well, Matt is a
Boston sports fan. But busy offseason for our Sixers. Busy off season.
The most exciting thing is they leakedthe old logos coming back because they
(02:37):
re signed Maxie. So apparently theowner that they just got rid of didn't
like that logo. What the hell? Yeah, come on, that log
was awesome. It makes you think, AI the answer everything that's great about
this city. So I can't I'mmost so excited to get my Maxie number
zero NU zero Philadelphia. Let's go. Yeah, getting hype for a Philadelphia
(02:58):
sports team in the off season.Jared McCain duke, shout out there.
You go a tradition like any otherto get excited about it sports team in
the offseason. All right, Alex, we'll revisit that, I promise on
the way out. But of course, Evan and I want to talk to
you about sport trade, and beforewe do that, we always like to
(03:20):
gauge our guest's age by not askinghow old they are, but getting their
favorite childhood sports memory. So ifyou wouldn't mind take us style memory lane,
please. Okay. So it's Octobertwenty ninth, two thousand and eight.
It's around nine fifty pm. Iwant to say, and Brad Ledge
(03:42):
throws a slider in the dirt.I'm sitting in, you know, twenty
five rows back of first base side. See the slider in the dirt,
And the last thing I remember,the ground was shaking and Shane Victorino does
that sort of squirrel dive on thepile by the time he comes from center
field. I didn't realize at thetime how big that championship was because I
didn't realize how few and far betweenit ultimately be. Hopefully this is the
(04:06):
year for the Phillies. They're playinga lot better, but that is far
and away. I just remember tryingto drive out of town that night.
My dad had to drive on sidewalks. He had to drive on grasp because
people were flipping cars. They weregoing crazy. That is and will always
be my favorite sports memory. Yeah, that ended the drought and of course
got them over to home finally towin that World Series. And Shane Victor,
(04:28):
you know, he earned that nicknamethe Fly in Hawaiian with that visual
as you just pointed out, greatstuff, excellent memory there, Alex.
I was there too, but Iwas in the absolute last row of the
state. It doesn't matter. You'reeither there or there was like row eight
hundred in the four hundred section,But to your point, you're there there
not now? I was there.Were you there for the first half of
(04:49):
that game too, when that wasas almost as cold as I've been in
my sporting spectator in life. Iremember they the I think it was like
the fifth top of the fifth inning, and they should have stopped it earlier,
and I think Cole Hammill's ended upgiving up a run or putting runners
in the scoring position, and thatwas what we all talked about. You
should have called that game earlier.And they came back and it was sort
(05:11):
of interesting. It felt like you'veseen the movie Groundhog Day. They played
the same hype videos that they playedto start of Game five at the restart
of Game five, and so Imade a sign that said Groundhog Day,
and I got on the drumbo trunkbecause I thought to myself, they're gonna
play the same sto at, whichthey did, which was interesting. And
then of course my dad brought asharpie. We signed the bottom of the
seats and as of like two yearslater, they were still there. But
(05:35):
obviously I don't know what exact seatI was in. I wish I knew.
I would go and check it.That is great, It's great answer,
excellent start. I'm so excited aboutthis conversation. We're about to Let's
do it well once again. CEOand founder of sport Trade Alex simple question
to get us started here. Whatis sport Trade? Sports Trade is a
(05:56):
license and regulated online sports betting platform. We're a mobile app where iOS,
we're Android, and we're available inIowa, Colorado, and New Jersey with
a couple more states hopefully coming thisfall. So when you say you're a
licensed sportsbook operator, let's talk aboutwhat how are you like you know,
the DraftKings and Fandels of the world. How are you different? Yeah,
(06:18):
so the way we're like draftings andFandels that you know, you create an
account with us, you fund theaccount, you can place bets, you
receive payouts, and we actually getthis question all the time from our new
players. Actually, one of thecool things what we do is when new
players sign up for our platform andcreate an account, we text you sometimes
it's me. We're a very smallteam. We're thirty five people. We
take a ton of pride in givingplayers like a VIP white glove experience.
(06:41):
That's how we're similar to a DraftKings. The way we're different are is the
prices are insane, right, Soif you're used to seeing minus one ten
minus one ten, maybe on aplayer prop you see minus one fifteen minus
one fifteen, you're going to seecloser to like a minus one oh four
minus one oh four line. Onsports trade, the limits are a lot
higher. When you place an inplay bet, there's no spinning wheel.
I mean, how many times you'resink thinking in that audio tube. Got
(07:03):
that in play bet. You've gotto line it up just right, you
place it, you get that spinningwheel, it tells you the odds change
and then you see the three pointergo in and you know you're sort of
turned away. You never get thaton sports trade, So think of Sports
Trade more of a premium experience.If you're a player that cares about price,
you care about limits. You wantto get a lot down, you
want to get a great price,you want to have an awesome experience.
(07:25):
That's really right now what sports Tradeis for. And so if that,
I mean, that sounds amazing.And you know, when I've been in
New Jersey, I've used the platformand I love it. I think it's
it's a phenomenal addition to this industry. But how is it that you're able
to do that, right? Likewhat goes on behind the scenes? Is
(07:46):
it different than what happens and whatI'll call it sort of the more traditional
sports books totally, So sort ofgoing a layer back. Now, when
I log onto DraftKings and I logon the sports Trade, I see a
price, and maybe that price isI think the Dodgers are in town this
week. I don't know who's pitchingtomorrow, but let's say the Phillies are,
you know, a minus one tenfavorite. So you might see minus
(08:09):
one ten over on sports Trade.You might see minus one eighteen on DraftKings.
And the reason you're going to seethat better price is the one other
thing that makes us unique to aDraftKings or Fandle is. When you log
onto Fandel, it's their price,right, you see a singular price.
They've come up with that price.Sport Trade works with multiple what are called
managed trading service providers. They're entitiesthat come in and power the pricing,
(08:33):
and they actually have to compete todeliver the best price. Knowing that if
one group offers let's say minus onetwelve on the phillies, but another licensed
group offers minus one ten, theplayer on sport Trades mobile app is going
to see minus one ten first.So we've created this sort of competitive aspect
that powers sport Trade, and it'sthat competitive aspect that drives better pricing for
(08:56):
the end consumer. That's something thatsort of goes on behind the scenes,
but since you're asking, that's whatleads us to have that great sort of
customer experience. What year did thisget started in not just being live and
available, but in your mind?In my mind, this was probably May
of twenty seventeen ish. I wasa senior at Drexel. I was sitting
(09:18):
down in some course. I tookan options trading course a year earlier,
and I was like, oh mygosh, you can bet on the price,
you know, movement of Apple stock. Right. I knew about trading
equities, but I didn't know aboutequity options. Right. I was young
in my sort of educational path.And an equity option of a call or
put allows you to take a directionalbet, a zero sum bet on whether
(09:41):
the price of a stock is goingto go up or down in a certain
amount of time. And I thoughtto myself, Wow, there's been so
much revolution that's happened in the youknow, electronic trading world, whether it's
you used to have to trade witha broker one on one as opposed to
on electronic exchange like a New YorkStock exchange. And beyond that, you
(10:01):
used to have to pay fifteen twentydollars to play put the place of stock
trade. Right, remember those adson trot Schwab we have trades are thirteen
ninety nine seventy nine. Well,now we all have robinhood and trades are
free. And so I thought tomyself, if sports betting ever became legal
in the US, I want tobuild a version of that. I want
to borrow a lot of that,those concepts, those techniques that have brought
down the cost of trading for theeveryday investor and bring that to sports betting.
(10:26):
And so that's where the idea started. I was a senior at Drexel
sometime in the spring of twenty seventeen. So you're a sports fan, that's
that's obvious. But were you agambler? Were your sports gambler? Did
you Did you enjoy wagering on games? Maybe of course behind the scenes with
a local bookie or at that pointin time I think it might have been
legal in Jersey twenty seventeen, orI altte too early there, No,
(10:48):
no, no, not until twentynineteen, twenty eight right, well twenty
eighteen May of twenty eighteen is whenthe Supreme Court throughout good TASPA. Yeah.
So before that you, for allintents and purposes, you were looking
at only retail in Nevada. Soin your mind you got this cooked up
senior in Drexel. Where did thepassion come from? As far as the
(11:09):
sports gambling angle? So I playedgolf there, and the first thing I
learned about sort of gambling and bettingis when you play golf, you sort
of learn about betting by betting onyourself. Hey, ten bucks I hit
this putt, you know, fifteenbucks. I hit it closer to the
pin, you know. And sothat's where I sort of learned of the
concept of betting. I actually didn'tdo a lot of sports betting. I
had a roommate in college that asI was learning about this amazing revolution that
(11:33):
was happening in electronic trading. Imean, seriously, if you wanted to
buy a share of IBM stock twentyfive years ago, it would cost you
thirty dollars per share, more thanit does now. Like, think about
how amazing that is. And what'shappened in the interim is the volumes have
exploded because the cost to transact andbuy or sell Amazon or Google or you
(11:54):
know, Netflix or IBM has comedown to like a penny. And so,
my friends, I'm learning about thisrevolution. He's showing me how sports
betting works, and I'm thinking,like, I'm looking at this spreadsheet.
This looks a lot like stock tradingforty fifty years ago. Terms I didn't
really understand, not a lot ofcontrol. The pricing was really shitty,
(12:15):
to use a lack of the lackof a better term. And so that
was really where it came together.And said, oh, okay, if
I can borrow just enough of what'shappened in the capital markets world and bring
it to the sports betting world,I think I can deliver an experience that's
lower costs, more efficient, andmore fun for the player. And that's
how it started. And of courseat that point I had no clue what
(12:35):
I was doing. I like tosay I have somewhat more of a clue
now, kind of still don't havea clue what I'm doing. But when
I started, I was like,oh man, how am I actually going
to build this? We all justfake it till we make it, right,
take it till you make it.Yeah, that's the ethos that get
you somewhere. So all right,so it's twenty eighteen and now sports betting
becomes legal. You've got this awesomeidea. What happens next? What do
(13:00):
you do to take this from anidea to something that's actually you know what
it is, or not necessarily whatit is today, but what it is
when you first were able to launchit. Yeah. So the central tenet
of this concept of how can Imake you know sports betting more like stock
trading? When you when you whenyou're buying an asset, it's just like
making it bed. It's the exactsame. And I knew that very early
(13:22):
on, and so I thought tomyself, Okay, well, I just
need to learn how a stock exchangeworks. And if I can just learn
how a stock exchange works, Imean, for christ almighty, I was
a four year major in finance.I should know how that works. And
I'm sitting there, and then Ican figure out this whole sports betting thing.
So I'm sitting there, I'm inthe first floor Lobos Building, Jersey,
Lobo Hall at Direxel, beautiful campus, brand new building at the time,
(13:45):
and I'm seeing the ticker You've seenthose old stock tickers where it shows
you, like the Amazon logo,Amazon's trading one hundred and thirty three dollars.
And then the next thing, Apple, Apple's trading on. Okay,
Apple's trading one hundred and fifty dollars. And I sat there, I'm like,
how does that number get there?What does that mean? Okay,
on hundred fty dollars, right,that's the estimation of our investors, we
think, for sure free cash flow. But no, no, no,
(14:05):
like technically one hundred and fifty whyis it not one hundred and forty nine
to ninety eight or one hundred andfifty point oh two. What does that
actually mean? Like, how doI actually bring buyers and sellers together?
And so that began probably a yearand a half journey of hacking together and
building the first free to play iterationof sport Trade, which you know,
as it turned out, ended upbeing very close to what we actually started
(14:26):
to build, and that was whatwas called a Central Element order book.
The first electronic central Element order bookwas probably built in mid to late nineteen
nineties, and as we started tobring on a real team to build it,
I think some of the folks webrought and were pretty surprised, like,
wow, you were pretty close.I mean, this is kind of
the way the stock market works,right, I'm either betting the Phillies or
(14:46):
I'm buying Amazon stock. It's theexact same thing from a transactional perspective.
And so that's how we started toget started. We build a free play
version of it. We went throughthe Comcast Technology incubator, Power by tech
Stars. We raised about three hundredthousand dollars and it wasn't until late twenty
nineteen early twenty twenty, we reallyraised our first round of capital, which
(15:09):
I didn't announce until twenty twenty one. That allowed us to go and get
a new Jersey license, build outa formal team, build out a former
set of rules and policies, andactually, at this point, I'm like,
Okay, I might have real businessidea here. I've raised some capital,
I've got some people involved. Igot very lucky to find just like
incredible people that built almost all ofit. So, yeah, that's how
it got started. Excellent stuff.Who was the main person that you were
(15:31):
bouncing this off of. It's agreat idea, great concept. Obviously you
know what you're talking about. Wecould all just hear it right now.
But was there someone that was reallyinfluential? Was it your father? Wasn't
a professor, someone that really madeyou believe that your concept is true?
So I think, you know,having to support of my parents, like
I would not be anywhere without them. My mom was actually professor at Drexel.
(15:54):
She was at the time the directorof the fashion department the west Fall
School of Arts and Design. Greatprogram, fantastic program. Yes, yeah,
I knew a couple of girls thatactually went to Drexel. Yeah,
they're super proud of that. Theywin awards each year. I'm blown away.
But what they're doing and that,well, that allowed me to go
to school for essentially free. Sothat privilege right starting off not having student
(16:14):
debt is huge. Now that allowsme to actually try and build something and
not take a salary for an extendedperiod of time. So without that,
I'm not sitting here right without mymom. My dad, he works in
healthcare industry out in Chester County.He's sort of he bets on sports a
little bit here and there. Buthe was again someone that was just like
(16:34):
really supportive and just said, Ithink you should try chasing this. I
don't really know anyone in the industry. I don't I can't really help in
that regard, but I can helpyou by lending my love and support.
And that was huge, man,that that was the most legitimizing thing.
I remember the day I pitched thisto my dad. I'm like, I
want to do this, I wanta year to do this, and I
showed him through the screens and like, just like his unrealistic support for me
(16:59):
is is you know, sitting sittinghere now thinking back had to be unrealistic,
but at the time, in themoment, that was so validating for
me, and that's what allowed meto really get started. And what I
did is I just went on LinkedIn, I went on Twitter. I reached
out to people. I said,I need to learn about sports betting.
I connected with Captain Jack Rufus,Spanky, all these sort of folks on
(17:19):
one side. On the other side, I said, I want to learn
more about how you build a stockexchange. I want to learn more about
I want to connect with people thatbuilt Noise, that built the Nasdaq.
And through all those sort of connectionsand just finding people, I started to
make connections and find, you know, turn one relationship into another and sort
of put one foot in front ofthe other. So then you're so you're
(17:40):
getting this thing built, and yousaid you went out and you raised some
capital. How much did you raise? So initially beyond the sort of three
or four hundred thousand dollars seed roundthat was really powered by tech stars and
comcasts. I mean, like imagineseeing comcasts as logo on your deck,
You're like, WHOA, Okay,I might actually have a real business idea.
Like again, so validating, notfor any real reason. But for
(18:03):
some person there decided that we thoughtthey were interested, they thought we were
real reason right, Yeah, it'ssomething. It helps you with the faked.
Do you make it? In twentynineteen is when I started to really
dig in get customer feedback. Ijoined a podcast called that This is a
Betting Podcast. Evan. I'm sureyou know Jake Williams pretty well. He
was in a pretty similar role Ithink over at at sport Radar initially and
(18:27):
then Points Bet, and I thinkhe was the COEO most recently of Points
Bett. Now I just think he'sdoing something new. How you doing,
Jake, Jake's awesome. You haveto get Jake on this podcast. And
so I went on that podcast,and at the time I didn't really think
much of it, but that gaveme a whole new audience, a new
(18:48):
potential network to connect with, andone particular person on that audience. His
name is David frohard Lane. Hecontacted me with a cold LinkedIn note,
you know, in Septembmber of twentynineteen. It said, Hey, you
know, I was a big marketmaking participant on all those electronic venues you
talk about all the time, andI want to pivot over at sports betting,
and I want to do the pricingfor you as a venue in sports
(19:12):
betting, and just so as luckwould have it, I was already traveling.
He lived in Chicago. I wasalready traveling in Chicago once every two
three weeks because I realized the wholetrading industry is in Chicago, particularly the
commodities trading industry. And so thiswas probably September early October of twenty nineteen.
I met him in person, andright away in the first five minutes,
(19:33):
I said to myself, I don'tcare what I'm doing anymore if I
need to just drop everything and jointhis dude, Like that's what I'm going
to do, because this is oneof the most brilliant minds I've ever heard,
and what his vision for sports bettingaligns so much with my vision.
And ultimately, through some diligence,I remember he called Rufus and did like
a reference check. I still needto buy Rufus like a case of wine
(19:56):
when I can ultimately afford it,and give Rufus a case of wine what
rufe has said in this sort ofphone call that David and Rufus had And
then in May of twenty twenty,we did a ten million dollar round led
by David's firm that he founded withhis co founder Brandon. They were at
this company called get Co, whichwas the first real market maker on electronic
(20:17):
venues revolutionized trading. They started acompany called dl Trading, and d L
Trading became our first managed trading serviceprovider and our first investors. So then
we were sort of off to theraces. So I'm just if I'm hearing
you correctly. It's all started bybeing on a podcast. Yes, So
there you go. It's incredible.That's why I'm here. I want the
(20:40):
sound call to be a perfect pross. So you're out there listening to this
number. No, it's it's great, and that's the look. It's definitely
getting a little bit more crowded,but you know, with the LinkedIn and
the social media and definitely pre pandemicmore than anything, with the birth of
all the legalization of sports gambling,like, there was plenty of opportunity for
(21:00):
anybody that had interest, whether it'ssomething like you had in your mind or
something to the people that want tocreate content from A to Z, and
there are people, there are brightminds all over the place, and that's
why I one of the reasons whywe wanted to get together to shine the
light on bright minds like yourself,Alex. And this is a great conversation.
Let's keep it going. I wantto ask you. Of course,
(21:22):
we had the pandemic, So hereyou are. You got this great idea,
you just had an unbelievable dinner intwenty nineteen, were able to get
all that capital, and then thepandemic happens. What happens next for you?
The pandemic happened. That almost putthe entire sort of fundraise and at
that time the future of the businesson ice. We went through with it
because we knew where we're just goingto be building the next couple of years
(21:45):
to get a product. The nicething about technology is most developers like to
work from home, and so you'reable to do a lot of that sort
of remote and at this time,I think it's summer of twenty twenty,
the first line of production codes startsto be written. We cool story.
So David said, look, youknow we're gonna build this thing. It's
going to act a lot like astock exchange when it comes to like putting
(22:08):
bets together. Matching bets, andso we know someone at get go that
could be perfect. Why don't youtalk to him? He could console,
he could maybe, you know,if you're thinking about outsourcing this. So
I get on the phone with thisguy's name's John Ross. I never forget
it. I had this bag.If I wasn't eating all day I was
working, I was eating these peanuteminems. I'm just shove them into my
mouth. I'm listening to John Rosstalk and I said, look, we've
(22:30):
been linked up with NASDAK. Westarted talking with them at this point.
You know, they could build ourmatching engine. And he's like, ah,
you know I was the CTO atNASDAC. You could take their match.
How about this, I'll just buildyour matching enge. I'll come join
the team. And I just remember, like an eminem dropping out of my
mouth sort of thing, like whatthis is like if you are a market
micro structure nerd like I am.John ross Is. He is, first
(22:52):
of all the most humble guy you'veever met, but he is like one
of the founding fathers of electronic trading. A lot of the stock exchange software
out there running in production right nowat this moment in time, built by
him. He was also one ofthe founders, one of the core principal
engineers at Atari. So he builtSimCity. So when I tell people John
Ross is the CTO of Nastec,people are like, whatever, Oh,
(23:15):
but he built SimCity. Oh mygosh, I love that game. Yeah,
exactly, that's cool. So soat this point it was probably six
or seven of us we started tobuild this out. We went to Ballet's
in New Jersey. We had anagreement to do market access that allowed us
to when we ultimately got it certifiedby the regulators, to launch in that
jurisdiction. And that was a riskthey took, right because at this point
(23:38):
you still have the Unibets and thebet Ways, a lot of European companies
that have decades of sports spending experiencecoming into these markets. And we had
a pitch deck like six people anda vision, you know, And so
there was a lot of risk thata lot of people had to take to
get this off the ground. Andit's just as I look back, just
like a ton of great luck,right that you're able to look back and
(24:00):
say, well, this is abig break, this is a big break,
This is a big break. Ithink so many times people try to
attribute everything they've done and accomplish tolike scale, when in reality, to
me, it's like a vast majorityof it is it's just like right place,
right time, good luck. Ithink it's a mix though, right.
I mean, it's it's getting thosebreaks, but it's also teeing yourself
up to get those breaks. It'syou know, meeting with the right people.
(24:25):
It's sending out these LinkedIn messages thatyou talked about, having some confidence
in yourself and teeing up those opportunitiesand then yeah, maybe a little bit
of luck and helping them see themacross the finish line totally. And also
the fact that, look, you'rebringing more to the table. There's always
that introduction, there's always that nicemeeting, and then people know, okay,
(24:45):
I don't really not so much wastemy time. But at the same
time, it's like, hey,obviously he's got something here. This guy
right here could potentially expand my horizonsor take something up another level. And
that's clear as day talking to youright now. A couple more questions as
far as what's what's sports you Obviouslyyou talked about the pitch deck, and
(25:07):
only a few people. The pitchdeck has definitely expanded a few chapters since
those days. How many people areworking for you right now? So we
have thirty five full time employees.We had scaled up the team, probably
in my mind looking back, abit too fast. Obviously, capital became
a lot more expensive in twenty twentyone twenty twenty two, and we had
to do what every team had todo, right, try and scale back
(25:27):
your expenses as much as possible withoutultimately affecting employees. The number one stakeholder,
it's port trade. Unfortunately, youknow, like a lot of other
businesses, headcount was affected as well, and so we had to bring the
team back. But if you've seenRocky, right, there's that scene where
Mick gets out there and Rocky's outof shape and Mick puts out of chicken
(25:48):
and Rocky spends like three minutes.That's a real scene. Like I'm a
movie like nut and that scene waslike real Rocky. Sylvestiu Stalone was like,
are you actually going to have mechase around of live chicken? And
yes, and that was him actuallytrying to catch the chicken. So we
had to sort of cut weight.We had to do with everything we had
to do to sort of survive.And the great thing now is we're now
(26:10):
ready to take on like mister tthyou know, round two sort of deal.
We're I think going a scale intostates four, five, six and
still be in that headcount of aroundforty, which when you look at other
operators you have, some of ourcompetitors have three thousand, four thousand employees.
We have to try and find todo a lot more with a lot
less, and so we had totake those steps to sort of set ourselves
(26:30):
up for success. But I reallydo feel like I use the term fighting
weight. I think we are kindof of fighting weight now being at thirty
five forty people. And you saidyou're going to be in hopefully four five
six states coming up soon. Yep. So we're in an application process with
a couple of states. I'm abig believe in karma, so like,
(26:51):
I don't want to say, oh, it's going to be state ex ra
y because you know, you guyshave such a big reach, you know,
Gosh forbid, there's a regulator thatsays, oh, you think you're
coming to my state? Interesting?Interesting, I thought I've made that decision.
So so because I'm a believing carmI can't you know, announce it
just yet, but we're working ona couple more, hopefully for the fall,
and then in twenty twenty five we'dlike to get into another three or
(27:14):
four markets ahead of football season then, because as you guys know, football
season is when you acquire your mostvaluable players money to be made exactly,
So just real quickly take me throughgoing back to when you talked about the
market making, and you've got someentities on one side that are you're essentially
pairing up with people that want tomake wagers on one side or the other
(27:37):
of a line, and then whatdo you do? Are you just taking
a cut? Basically? Yep.So we if you're looking at our app
for the first time, you seeall these great prices, those include what's
called a commission, and the commissionis simply a small percentage of the profit
you make on a winning bed.So you might see minus one oh four
minus one oh four, the pricingis actually minus one of two mone too,
(28:00):
but adding in our two percent commissionand being as transparent as possible with
you so you can actually compare thatall in price versus the price of FanDuel
and draftings in ESPN and whatever thatincludes that commission. So and then we
also share revenue with these managed tradingservice providers, so they're helping us put
these prices up, and then ultimately, when those prices are taken down by
(28:21):
virtue of customers placing bets, wedo a revenue share on the back end
with those licensed partners. Gotcha.So this is it's it's complicated behind the
scenes, but from a player standpoint, it's still what you see is what
you get. Here, here's thebet I'm making, and here the odds
I'm getting on it totally and someof the cool stuff we've been seeing over
(28:41):
this summer is like we've really doveinto golf. You know, this is
not the most exciting part of thesports betting calendar, as I'm sure you
guys know and appreciate, but golffor us has been huge. And what
we're re really differentiat on golf islike you can get coming into Sunday fifteen
twenty thirty fifty even one hundred thousanddollars down on some prices that just mop
(29:03):
the floor with everybody else. Andso when you place that bet on sport
trade versus a competitor. You mightget fifteen to one on sport trade,
whereas the competitor might be offering tento one. We think about it,
that's a fifty percent odds boost,right, fifteen over ten, and so
I think we're learning on how bestto pitch that to players. Players haven't
been as price sensitive as you'd think, but players are very boost sensitive.
(29:26):
Oh my gosh, I have afifty percent odds boost. So we've been
sort of exploring do we sort ofexpress our price as the FanDuel price plus
a boost, which sounds a lotmore interesting than just fifteen to one versus
ten to one. So that isone of the areas where we have really
differentiated is on golf. You willsee we have a brand new feature on
our inn app called the Tape whereyou can see a live feet of every
(29:48):
single bet coming through in real time, one hundred percent transparency. How great
would that be for fandel Hey,what's being bet on right now? We
give you all that in real time, And even yesterday we have players betting.
I think the top bet it wasa close to fifty thousand dollars golf
bet between before round four of theJohn Deere Classics my guy Davis to win
or what was bet? Someone bettwenty thousand on Davis to win, so
(30:10):
that was a winner at plus oneoh six. And then someone bet I
think fifty grand to win like twogrand that Ctpan wouldn't win. That's another
cool advantage of the sports rare.You can bet no. So both of
those, both of those won,almost like short selling exactly, almost like
short selling. So it works inour system as if you're shorting. But
when you're looking on the app,pic just says, Okay, you can
take Ctpan at maybe forty to one, and you could take him not to
(30:33):
win at like minus forty five hundred, so you're laying forty five to win.
One. I wanted to follow upon the golf and you kind of
just went into it a little bit. But why and I read this in
an article that you were being interviewed, I think last year on the Biz
Journal. Why golf over the othersports? When NFL is obviously it controls
all even college football football in general, maybe soccer with the global appeal,
(30:55):
Why golf golf, I think isit really draws into some of the huge
benefits of sport trade. One whenwe talk about like minus one of four
versus minus one ten. It doesn'tseem like a lot to most players,
right, Oh, I'm betting tenbucks. It doesn't really matter, which
is true. But when you translatethe better pricing that we have on golf,
you go to that same example,fifteen to one versus ten to one.
(31:18):
That's almost the same difference as minusone of four versus minus one ten.
But because it's a longer shot inthe way the American ods sort of
tick table and structure works, itends up feeling like a lot more.
That's one and two, as thename suggests. Sport trade. So the
cool thing about sports trade is thatyour bet always has a liquid fair value.
So if you place one hundred dollarsbet on your favorite sports book on
Davis Thompson round one, at theend of round one, the cash out
(31:41):
might be six hundred dollars because hehad an incredible reverirse round. On sport
Trade, it's gonna be like doublethat, right. And so because golf
has like some nice stop start,stop start, you have four days think
about the British Open coming up,Bryce and Deschambeau, and to put my
thousand dollars there. On sports trade. It's, you know, eight to
one versus draftings at six to one. It starts to look like a huge
(32:04):
difference because now the cash out valuethat same a thousand is so much more
on sports trade. So that's whywe like to focus on. Like,
so if I think that the Philliesare gonna go up big and then they're
gonna the bullpen is gonna blow it, and then they're gonna win it.
In extras, I can buy thePhillies pregame, sell them after the sixth
inning, and buy them back atthe start of the tenth exactly. Yeah.
(32:25):
In fact, the very first tradethat was made in Iowa. My
dad's also a huge Phillies fan.He is very much a square more recreational
sports better. His biggest bet todate was maybe fifty bucks. He came
out to Iowa, went to theField of Dreams to place the burn of
bet it is. Have you beenthere? I have not your baseball guy,
(32:45):
Dyersville, Iowa. It's as mustall right, Like it's a must.
It's like it's part of the it'syou know, the homage you pay
the game you go for one ofthe major League baseball games. It just
go. We went to one ofthe Major League Baseball games. My dad
takes one week off a year.It happened to be that week in twenty
twenty two. So we did thatand then we went back. I actually
had to Anthony our CFO, andI had to test the border of Iowa
(33:07):
ourselves, someone on the team andto do it right. Thirty five people
CEO and CFO. That's our choicegoing on. I widget off going to
Iowa exactly. And so we actuallytested the border and we made our way
to Dyersville and we announced actually acool promo we did. We drove sixteen
hundred and ninety nine miles testing Iowaborder. So we gave every player ten
percent back on the first way,dro up to sixteen hundred and ninety nine
(33:29):
bucks. And then we went backto Diyersville a third time to do this
first bet. And so my dadput he bet the Phillies and I want
to say close to nineteen to one. He put five hundred and fifty to
pay ten thousand, and that fivepoint fifty we were just looking as worth
about fourteen hundred right now. Andso look if he plaid that fate,
(33:52):
same five point fifty on DraftKings thatmight be worth one thousand dollars right now,
because what competition did they have toreally give you a great cash out
price versus an our system. Youknow that there's a competitive element that produces
the price. You see, that'snot only the price you can pay to
get into a bet, it's alsothe cash out value of getting out of
a bet, and so that actuallystays open. So as the hopefully Phillies
(34:15):
make their World Series run, hisfive hundred and fifty dollars that he initially
put in is going to have alive value, you know, three to
two, bottom of the ninth inninghopefully against the Arizona Diamondbacks again, and
hopefully we get it done and don'tlose two straight games at home. But
it's kind of a fair liquid value. The other really cool thing you can
do on sport trade that you can'tdo anywhere else is he could say,
you know what, I want totake my five point fifty that initially put
(34:37):
in betting on the Phillies to winthe World Series out, put that back
in my pocket and let the restride. So you can actually sell some
of your bet in a very intuitiveway on sport trade. So yeah,
as the name suggests, we reallywant to teach players that, like,
hey, when you place a bet, it has a fair liquid value,
and from there you can you cancash out some, you can cash out
(34:57):
all, you can double down exactlyas you suggested. That's why the tagline
stop betting, start trading exactly.It makes perfect sense. Love it,
absolutely love it. Great story.All right, Well, I got a
couple more here for you, Alex. First of all, just as far
as with the introducing New states onlinebetting apps only permitted to strike a partnership
(35:19):
with a brick and mortar casino,is that still will that change? Is
that, you know halting you inany way talk a little bit about that
if you want to. Mind.So, this is an area where I'm
getting a lot more involved personally,is on the legislative front creating opportunities for
sports trade. So all in all, you know, when you think about
sport trade from a business perspective,for every one hundred dollars of wagers that
(35:40):
we accept, we probably keep aroundtwo bucks, right, So that would
be a two percent hold. Asit's known in the industry. Other competitors
they want to be in the tenpercent range, right, And so what
we're starting to do with select states. Pennsylvania is going to start to be
chief among them. Is We're goingto try and create our own pathway into
the market and say, look,we have a real value to your ecosystem,
(36:04):
mister or missus regulator. We're actuallyreally an interesting product to a lot
of players that are limited or bannedat some of your other venues, and
we want to be a regulated alternativeto the plethora of unregulated options that those
players in let's say Pennsylvania are currentlyplaying on. So we went and actually
pulled our New Jersey players, andour Iowa players and our Colorado players.
(36:27):
Two thirds of our audience has placedan offshore bet in the last twelve months,
which means no tax, no regulation, no oversight, and that volume
from those players has come down.That offshore volume has come down by virtue
of using sports trade, which meanssports trade has a real benefit to the
ecosystem. Less so from a taxcreation perspective and more for why do you
(36:50):
regulate sports betting in the first place. You want to provide a regulated alternative
to the unregulated options, as aformer director of the NJDG Daveybuck has amously
said, And so what we wantto do is come to Pennsylvania and say,
look, we can't pay thirty sixpercent tax, we can't pay ten
million dollars a part of the casino. To do that, we need what's
called an innovator's track license. Andso in some of these states we're going
(37:12):
to be introducing legislation that brings inI mean, how great would sports betting
could be if you can bring inmore competitive options that don't have to go
through these huge barriers and entry.Some states Iowa, Colorado very business friendly.
Other states Illinois, Massachusetts, Pennsylvania, New York, we're going to
need to create a pathway for businesseslike sportshow to come in. And that's
(37:32):
where I get really excited, asyou can probably tell. And I like
to spend a lot of my timebecause when I connect with a legislator,
they're like, you know, thatmakes so much sense. I love what
you're doing. It's so pro player, it's so transparent, it's so low,
you know, low costs, andyou're actually not competing as much for
the DraftKings player as much as you'rebringing on the player that Draftickings doesn't really
want. And so sure, yeah, you know what you need a different
(37:57):
set of rules to come into mymarket. You're still going to be regulated
by the same regulator. You're stillgoing to have all those same sort of
regulations you need to follow. Butfrom a cost of vetory perspective, that
totally makes sense. So to answeryour question, Sean, yes, there
are going to be some states thatwe're going to create this sort of innovator's
track and we're starting to find acoalition of like minded operators that say,
yeah, I can't pay the fiftymillion dollars in New York, twenty five
(38:21):
million dollars in New York, thetwenty million dollars in Illinois for mobile only
license, but I can come inand I can still create tax revenue and
more importantly, bring these players backinto the regulated market with this innovator's track
license. I think it would doa world of good for all these regulators
to hear exactly what you just said. It just it makes a lot of
sense. And one of the biggripes you see, whether it's not online
(38:44):
and no one's friendly online, weget that, but a lot of gripes
there is the limiting and it's realand you just brought up offshore one thing
to a point with all love andrespect not guaranteed either, right, you
know that sometimes you deal with thoseoffshores and it's like, hey, wait
a minute, we're my money,you know if we've heard of those bad
stories. So nobody really wants todo business offshore, let's just put it
(39:05):
that way. And that's something thatthe industry is totally aligned on. I
mean, you're getting seasoned assist letterscoming from state regulators now, at some
of them more high profile offshore operators. The American Gaming Association's been all over
this for years. So I thinkif there's any issue that the industry can
can unite on, it's, youknow, limiting and preventing people from wagering
(39:29):
offshore, because, as you guysboth said, when you combine a lack
of any tax revenues with a lackof any real enforceable regulations, you know,
that's not really a winner in anyone'sbook. Yeah, and I don't
even think to your point, Sean, that players want to play offshore,
right, they want to play wherethey can deposit with PayPal and everything simple
and easy, and they it's thisvery simple win laws statement they can use
(39:52):
for the irs right to pay taxesbecause a lot of these offshore players are
the players that don't do the samegame parlays. They're a little bit more
of the older school, bigger dollarsort of mainline meat and potato markets.
Player that would love an option thatoffers minus one h five as opposed to
minus one ten, would love tobet five thousand dollars as opposed to one
hundred and fifty dollars or whatever they'restake limited to. So this is where
(40:15):
we can come in and even bean ally to some of these larger operators.
Look, you don't want these players, right, That's okay. If
you really want to go after theoff shores, you can say, look,
sport Trade is part of our coalition, and they'll take all these players
that we don't want. And that'show mister or missus regulator, you can
guarantee that these players stay on shore. We may not want them. Our
(40:35):
business models a little different, butsports trades set up in a way that
they can keep these players in theirregulated market, and states like Massachusetts have
had roundtables on player limiting. It'sgoing to start to become more prevalent,
and the answer isn't to force anoperator to accept all players, right.
The answer is to create a competitiveenvironment so there's enough competition so that there's
different regulated options trying to go afterdifferent parts of the regulated market. That's
(41:00):
the answer to the question. Andagain when we talked to a legislator,
they're like, this makes so muchsense, Like this isn't this isn't something
crazy idea. Yeah, you can'tpay the ten million in it casino,
Okay, let me work with you. Yeah, gaming is really tough.
I can't guarantee it's going to passin this you know session, or even
next session, but let's stick withit. This is something that ultimately is
going to make sense in our market. Fantastic stuff. Alex Kane, once
(41:22):
again the CEO and founder of sportTrade Stop Betting, Start Trading. Check
them out online. You can downloadthe app right now. There's a text
message I sent it to my phonelast night Boom, I got the ten
percent cash back on all my wages. Right now I'm figuring out a little
bit more about how this app works. Of course, great conversation here.
Get Sporttrade dot com online as whereyou can find them. Alex. Excellent
(41:46):
stuff, great insight information across theboard. Number one. Number two.
I want to get you out ofhere on this one though, a little
fun one. You did say you'rea movie buff and you brought up Rocky,
so you can't answer Rocky. Butthe Greatest Sports Movie to you?
That's where I'm at. Yeah,that that one tugs at the heartstrings.
(42:06):
Man, you know with the dadplaying catch. If you build it,
they will come when he saves thedaughter which she chokes on the hot dogar
are you kidding me? Niagara fallsover here? That's good, that's good,
great stuff. What is your answeron that one? What's my answer
on the greatest sports movie to you? Yeah? Just my favorite sports movie.
(42:28):
You're flip into the channel you seeit's on. You gotta watch it?
Oh man, stump them? Yeah, seriously, I don't this is
I don't know if it's my favorite, but it's for some reason. It
makes it pause me any given Sunday. It's fantastic. It's a good it's
a great movie, Jamie. Yeah, I don't know. That's that if.
(42:49):
That's definitely one that I'm not gonnanot gonna skip over if it's on
TV. I like that. Rudy'sanother good one too. You just learned
like, listen, it's all aboutattitude. It doesn't matter. You could
lack all the physical gifts in theworld, but if you're willing to outwork
ever, this man's standing. Sothat is another movie. When that comes
on, you're like, I haveto watch it, watch it. Whatever
I plan on doing is done,whether it's Field of Dreams or or Rudy,
(43:10):
Like, you gotta watch the movie. Yeah, I know. He
was the main character in The Rock, which was a show on Fox,
and it was the janitor in inRudy. And when he goes and sees
him and watches him and he's claughing. That's another one. Tugs at my
heartstrings. Alex, great stuff man. Can't thank you enough for stopping it.
(43:30):
Continued success once again. We'll bechecking out everything that Sport Trade has
to offer and can't wait till it'slive right here in Pennsylvania. All right,
little post pod recap as we alwaysdo here on Behind the Veig Episode
two. Evan, what a greatconversation right there, obviously with Alex Kane
from Sport Trade. A few thingsthat just hit me right from the jump
(43:53):
is the first, it's clearly somethingdifferent than the other operator. The other
sports, no question, you know, and I get it. It's it's
it's it's a it's a crowded area, right for lack of a better term,
when in this sports gambling ecosystem,and I'm sure that there are a
lot of people that have an ideaand trying to bring it and make it
(44:15):
happen, But there's got to bea different lane for people like Alex and
sport trade right. Like to me, I understand DraftKings, FanDuel, you
know, ESPN, BET, allof the big time operators. It feels
like they want to go about ita different way, and they can because
(44:36):
they have so many people and somuch money to market. And I understand
it's probably not endless, but atthe same time, it's definitely not on
their level. So from the legislative, which is a whole nother avenue that
I need to learn more of.But in Alex and that short time we
had him, he made it understand. I thought he spoke the language real
clear for people like me. Sohope is that when he gets in front
(45:00):
of regulators, whether it's Pennsylvania,whether it's Illinois, whatever state it is,
you know, I hope that theylook at him and they hear him
and take him serious and and andultimately give him the green light because it
seems like it's different than the othersports books and when you're not targeting some
of the people that are big fishor the sharps, and it's like,
(45:21):
hey, that's somewhere that we wantto go down. I'm with that man.
Like that's one of the things thatjumped out of me in that conversation.
Yeah, I just I love howhow driven he is. Obviously an
incredibly bright guy, but with aphenomenal idea that he's now seen he's seen
through to reality. Right, they'rein they're in three states, he said,
(45:42):
they're going to be in more.And that takes a ton of hard
work, both, you know,on the on the fundraising side, on
the development side. I mean,you heard him talk about how what it
takes to get this off the groundand the pandemic. Yeah, yeah,
no question. And but and Ithink it's great. It is a it's
a differentiated product that's out there,and I think it's a wonderful addition to
(46:07):
to the choices that people have outthere. It doesn't mean that you can't
have other sports betting accounts, butyou know, if you're in a state
where where sports trade is legal.I think it's it's a wonderful option to
be able to bolt on as ayou know, as a better, whether
you're a casual better, sharp better, or sort of anything in between.
(46:27):
And uh, you know love thefield of dreams, Yes, field of
dreams. Bit I hate I hateto say that I might have like caught
you off guard in the middle ofthe podcast, But did you draw a
blank on that question? I'm wondering, not a blank so much as I
think. You know, look,I'm started thinking of one hundred movie.
Well I'm years old, and sowhat was your like favorite sports movie?
Could be like the you know,the the Tier Jerkers that you guys menage.
(46:52):
I mean I think if you askedme, like, what's my most
nostalgic sports movie, probably like TheMighty Ducks, right, I mean that
was It's pretty good. That waslike, you know, I was a
kid, and I think I waslike the age of those kids when they
were filming in I'm like, oh, I can kind of cause I relate
to this even though I couldn't playsports at all. But you know,
like so so I think it's adifferent it's a different question. It's like
(47:15):
what's your most nostalgic sports movie versuslike what's the one that you like pause
when it comes on TV? Andnot necessarily one of the same and you
want to you know, you don'twant to give that that same answer,
which you know the movie, Somy mind, obviously, I'm like,
Okay, Field of Dreams, I'mright there. You know. One of
the movies that I always bring upis Miracle, Like Miracle was a great
movie. It was a great movie. Now and Kurt Russell, as far
(47:37):
as the coach is concerned, likethat was herb Brooks. It was unbelievable.
So great movie. That's one thatI always throw out there for people.
Rudy, Rudy that doesn't get alot of love. I mean,
look, there's a tough right.I mean, you can go down like
the major league path. Yeah,we can talk about basketball with like the
South Park creators, right, Imean, there are a lot of different
paths. We can go cool runnings, I mean, so you know running,
(47:59):
Oh yeah, that's grateful by yeahyou like that. So I mean,
right, like it's this this isnot a one size fits all question.
I think they're they're this is thelawyer answering me. But there are
a lot of asterisks that come withwith answering questions like that love that all
right? And finally, let's puta bow on this episode. Fantastic guest
Alex Kane from sport Trade Philadelphia sportsfan, a guy that's from here,
(48:22):
Trexel Zone. How cool is that? And and obviously a gentleman that's going
to be leading to charge for somebodyif it's not sports Trade in the future.
Uh, I can only imagine thepeople that are gonna knocking on his
Now. I've known Alex for awhile. He's a great guy. Uh
what do you say an eight handicaphe told us off to. Yeah,
(48:43):
he's uh he a handicap. Yeah, that's that's my per whole handicap.
I think so it was this weekend, that's for sure. Well, Evan,
another fantastic episode of Behind the Veigand for the people that might have
missed it, you can catch usat FOXPHL Gambler dot com download all of
our podcasts there. Once again,this has been another edition of Behind the Vig.
You are listening to Behind the Vague, a podcast mini series that takes you
beyond the bets and strategies and moreinto the business of the sports betting industry.
Now Here are your hosts, SeanBrace and Evan Davis. That is
correct. I am Sean Brace.He is Evan Davis. This is episode
(00:21):
two Behind the Vague, and folks, we got ourselves a good one.
Evan, I am looking forward toour discussion this afternoon. This is a
bright young man and one heck ofa Philadelphia sports fan. Yeah, I
can't wait. We've got Alex Kine, CEO and founder of sport Trade.
And for those who don't know,sport Trade is a sports betting operator that's
(00:44):
live in three states right now,possibly more to come, but definitely a
different model than what you see onpretty much everyone else. And we're looking
forward to having Alex tell us aboutit and learning more about how we got
to where he is. All right, let's go, here we go,
Let's not wait spending more time Behindthe Vegue Episode two with Alex Kane.
All right, Episode two Behind theVeig. You already know who the hosts
(01:07):
are. My name is Sean Brace, of course, Evan Davis. No
need for the introduction. You justheard us rant and ray for the last
couple of minutes. But folks,we are excited to have our guest number
two in studio with us. Andthis gentleman has a lot going on,
and of course we can even tiptoearound the world of Philadelphia sports as he
is a Sixer slash Philadelphia sports fanand it was a has been a busy
(01:30):
offseason for the Philadelphia seventy six ers, so I'm excited to hear a little
bit more about his thoughts on allthings six Ers, Philadelphia sports. But
he's here to talk about his babyand at his sport Trade. It's the
app you can check those guys outat on socials at sports Trade, sport
Trade Underscore app, and it isthe CEO and founder of Sports Trade,
(01:53):
Alex Kine. I keep wanting toput the s on Alex. I apologize
sport Trade sir. Hello, Sohow we doing, Alex? Are you
guys doing? Congrats and the launchof this thing. When Evan told me
about this, I said, Igotta do. I gotta be in studio
with you guys. Mom man,that's what we like to hear. Alex
excellent. Great to have you didI get that right? Philadelphia sports fan,
(02:13):
I know the Sixers fan. Isaw a couple of videos you repping
the T shirt you were on withBoston versus the book. Those are my
guys, Matt Prout and Dave andyou were repping the Sixers loud and proud
there and that's a good thing asthey're Boston. Well, Matt is a
Boston sports fan. But busy offseason for our Sixers. Busy off season.
The most exciting thing is they leakedthe old logos coming back because they
(02:37):
re signed Maxie. So apparently theowner that they just got rid of didn't
like that logo. What the hell? Yeah, come on, that log
was awesome. It makes you think, AI the answer everything that's great about
this city. So I can't I'mmost so excited to get my Maxie number
zero NU zero Philadelphia. Let's go. Yeah, getting hype for a Philadelphia
(02:58):
sports team in the off season.Jared McCain duke, shout out there.
You go a tradition like any otherto get excited about it sports team in
the offseason. All right, Alex, we'll revisit that, I promise on
the way out. But of course, Evan and I want to talk to
you about sport trade, and beforewe do that, we always like to
(03:20):
gauge our guest's age by not askinghow old they are, but getting their
favorite childhood sports memory. So ifyou wouldn't mind take us style memory lane,
please. Okay. So it's Octobertwenty ninth, two thousand and eight.
It's around nine fifty pm. Iwant to say, and Brad Ledge
(03:42):
throws a slider in the dirt.I'm sitting in, you know, twenty
five rows back of first base side. See the slider in the dirt,
And the last thing I remember,the ground was shaking and Shane Victorino does
that sort of squirrel dive on thepile by the time he comes from center
field. I didn't realize at thetime how big that championship was because I
didn't realize how few and far betweenit ultimately be. Hopefully this is the
(04:06):
year for the Phillies. They're playinga lot better, but that is far
and away. I just remember tryingto drive out of town that night.
My dad had to drive on sidewalks. He had to drive on grasp because
people were flipping cars. They weregoing crazy. That is and will always
be my favorite sports memory. Yeah, that ended the drought and of course
got them over to home finally towin that World Series. And Shane Victor,
(04:28):
you know, he earned that nicknamethe Fly in Hawaiian with that visual
as you just pointed out, greatstuff, excellent memory there, Alex.
I was there too, but Iwas in the absolute last row of the
state. It doesn't matter. You'reeither there or there was like row eight
hundred in the four hundred section,But to your point, you're there there
not now? I was there.Were you there for the first half of
(04:49):
that game too, when that wasas almost as cold as I've been in
my sporting spectator in life. Iremember they the I think it was like
the fifth top of the fifth inning, and they should have stopped it earlier,
and I think Cole Hammill's ended upgiving up a run or putting runners
in the scoring position, and thatwas what we all talked about. You
should have called that game earlier.And they came back and it was sort
(05:11):
of interesting. It felt like you'veseen the movie Groundhog Day. They played
the same hype videos that they playedto start of Game five at the restart
of Game five, and so Imade a sign that said Groundhog Day,
and I got on the drumbo trunkbecause I thought to myself, they're gonna
play the same sto at, whichthey did, which was interesting. And
then of course my dad brought asharpie. We signed the bottom of the
seats and as of like two yearslater, they were still there. But
(05:35):
obviously I don't know what exact seatI was in. I wish I knew.
I would go and check it.That is great, It's great answer,
excellent start. I'm so excited aboutthis conversation. We're about to Let's
do it well once again. CEOand founder of sport Trade Alex simple question
to get us started here. Whatis sport Trade? Sports Trade is a
(05:56):
license and regulated online sports betting platform. We're a mobile app where iOS,
we're Android, and we're available inIowa, Colorado, and New Jersey with
a couple more states hopefully coming thisfall. So when you say you're a
licensed sportsbook operator, let's talk aboutwhat how are you like you know,
the DraftKings and Fandels of the world. How are you different? Yeah,
(06:18):
so the way we're like draftings andFandels that you know, you create an
account with us, you fund theaccount, you can place bets, you
receive payouts, and we actually getthis question all the time from our new
players. Actually, one of thecool things what we do is when new
players sign up for our platform andcreate an account, we text you sometimes
it's me. We're a very smallteam. We're thirty five people. We
take a ton of pride in givingplayers like a VIP white glove experience.
(06:41):
That's how we're similar to a DraftKings. The way we're different are is the
prices are insane, right, Soif you're used to seeing minus one ten
minus one ten, maybe on aplayer prop you see minus one fifteen minus
one fifteen, you're going to seecloser to like a minus one oh four
minus one oh four line. Onsports trade, the limits are a lot
higher. When you place an inplay bet, there's no spinning wheel.
I mean, how many times you'resink thinking in that audio tube. Got
(07:03):
that in play bet. You've gotto line it up just right, you
place it, you get that spinningwheel, it tells you the odds change
and then you see the three pointergo in and you know you're sort of
turned away. You never get thaton sports trade, So think of Sports
Trade more of a premium experience.If you're a player that cares about price,
you care about limits. You wantto get a lot down, you
want to get a great price,you want to have an awesome experience.
(07:25):
That's really right now what sports Tradeis for. And so if that,
I mean, that sounds amazing.And you know, when I've been in
New Jersey, I've used the platformand I love it. I think it's
it's a phenomenal addition to this industry. But how is it that you're able
to do that, right? Likewhat goes on behind the scenes? Is
(07:46):
it different than what happens and whatI'll call it sort of the more traditional
sports books totally, So sort ofgoing a layer back. Now, when
I log onto DraftKings and I logon the sports Trade, I see a
price, and maybe that price isI think the Dodgers are in town this
week. I don't know who's pitchingtomorrow, but let's say the Phillies are,
you know, a minus one tenfavorite. So you might see minus
(08:09):
one ten over on sports Trade.You might see minus one eighteen on DraftKings.
And the reason you're going to seethat better price is the one other
thing that makes us unique to aDraftKings or Fandle is. When you log
onto Fandel, it's their price,right, you see a singular price.
They've come up with that price.Sport Trade works with multiple what are called
managed trading service providers. They're entitiesthat come in and power the pricing,
(08:33):
and they actually have to compete todeliver the best price. Knowing that if
one group offers let's say minus onetwelve on the phillies, but another licensed
group offers minus one ten, theplayer on sport Trades mobile app is going
to see minus one ten first.So we've created this sort of competitive aspect
that powers sport Trade, and it'sthat competitive aspect that drives better pricing for
(08:56):
the end consumer. That's something thatsort of goes on behind the scenes,
but since you're asking, that's whatleads us to have that great sort of
customer experience. What year did thisget started in not just being live and
available, but in your mind?In my mind, this was probably May
of twenty seventeen ish. I wasa senior at Drexel. I was sitting
(09:18):
down in some course. I tookan options trading course a year earlier,
and I was like, oh mygosh, you can bet on the price,
you know, movement of Apple stock. Right. I knew about trading
equities, but I didn't know aboutequity options. Right. I was young
in my sort of educational path.And an equity option of a call or
put allows you to take a directionalbet, a zero sum bet on whether
(09:41):
the price of a stock is goingto go up or down in a certain
amount of time. And I thoughtto myself, Wow, there's been so
much revolution that's happened in the youknow, electronic trading world, whether it's
you used to have to trade witha broker one on one as opposed to
on electronic exchange like a New YorkStock exchange. And beyond that, you
(10:01):
used to have to pay fifteen twentydollars to play put the place of stock
trade. Right, remember those adson trot Schwab we have trades are thirteen
ninety nine seventy nine. Well,now we all have robinhood and trades are
free. And so I thought tomyself, if sports betting ever became legal
in the US, I want tobuild a version of that. I want
to borrow a lot of that,those concepts, those techniques that have brought
down the cost of trading for theeveryday investor and bring that to sports betting.
(10:26):
And so that's where the idea started. I was a senior at Drexel
sometime in the spring of twenty seventeen. So you're a sports fan, that's
that's obvious. But were you agambler? Were your sports gambler? Did
you Did you enjoy wagering on games? Maybe of course behind the scenes with
a local bookie or at that pointin time I think it might have been
legal in Jersey twenty seventeen, orI altte too early there, No,
(10:48):
no, no, not until twentynineteen, twenty eight right, well twenty
eighteen May of twenty eighteen is whenthe Supreme Court throughout good TASPA. Yeah.
So before that you, for allintents and purposes, you were looking
at only retail in Nevada. Soin your mind you got this cooked up
senior in Drexel. Where did thepassion come from? As far as the
(11:09):
sports gambling angle? So I playedgolf there, and the first thing I
learned about sort of gambling and bettingis when you play golf, you sort
of learn about betting by betting onyourself. Hey, ten bucks I hit
this putt, you know, fifteenbucks. I hit it closer to the
pin, you know. And sothat's where I sort of learned of the
concept of betting. I actually didn'tdo a lot of sports betting. I
had a roommate in college that asI was learning about this amazing revolution that
(11:33):
was happening in electronic trading. Imean, seriously, if you wanted to
buy a share of IBM stock twentyfive years ago, it would cost you
thirty dollars per share, more thanit does now. Like, think about
how amazing that is. And what'shappened in the interim is the volumes have
exploded because the cost to transact andbuy or sell Amazon or Google or you
(11:54):
know, Netflix or IBM has comedown to like a penny. And so,
my friends, I'm learning about thisrevolution. He's showing me how sports
betting works, and I'm thinking,like, I'm looking at this spreadsheet.
This looks a lot like stock tradingforty fifty years ago. Terms I didn't
really understand, not a lot ofcontrol. The pricing was really shitty,
(12:15):
to use a lack of the lackof a better term. And so that
was really where it came together.And said, oh, okay, if
I can borrow just enough of what'shappened in the capital markets world and bring
it to the sports betting world,I think I can deliver an experience that's
lower costs, more efficient, andmore fun for the player. And that's
how it started. And of courseat that point I had no clue what
(12:35):
I was doing. I like tosay I have somewhat more of a clue
now, kind of still don't havea clue what I'm doing. But when
I started, I was like,oh man, how am I actually going
to build this? We all justfake it till we make it, right,
take it till you make it.Yeah, that's the ethos that get
you somewhere. So all right,so it's twenty eighteen and now sports betting
becomes legal. You've got this awesomeidea. What happens next? What do
(13:00):
you do to take this from anidea to something that's actually you know what
it is, or not necessarily whatit is today, but what it is
when you first were able to launchit. Yeah. So the central tenet
of this concept of how can Imake you know sports betting more like stock
trading? When you when you whenyou're buying an asset, it's just like
making it bed. It's the exactsame. And I knew that very early
(13:22):
on, and so I thought tomyself, Okay, well, I just
need to learn how a stock exchangeworks. And if I can just learn
how a stock exchange works, Imean, for christ almighty, I was
a four year major in finance.I should know how that works. And
I'm sitting there, and then Ican figure out this whole sports betting thing.
So I'm sitting there, I'm inthe first floor Lobos Building, Jersey,
Lobo Hall at Direxel, beautiful campus, brand new building at the time,
(13:45):
and I'm seeing the ticker You've seenthose old stock tickers where it shows
you, like the Amazon logo,Amazon's trading one hundred and thirty three dollars.
And then the next thing, Apple, Apple's trading on. Okay,
Apple's trading one hundred and fifty dollars. And I sat there, I'm like,
how does that number get there?What does that mean? Okay,
on hundred fty dollars, right,that's the estimation of our investors, we
think, for sure free cash flow. But no, no, no,
(14:05):
like technically one hundred and fifty whyis it not one hundred and forty nine
to ninety eight or one hundred andfifty point oh two. What does that
actually mean? Like, how doI actually bring buyers and sellers together?
And so that began probably a yearand a half journey of hacking together and
building the first free to play iterationof sport Trade, which you know,
as it turned out, ended upbeing very close to what we actually started
(14:26):
to build, and that was whatwas called a Central Element order book.
The first electronic central Element order bookwas probably built in mid to late nineteen
nineties, and as we started tobring on a real team to build it,
I think some of the folks webrought and were pretty surprised, like,
wow, you were pretty close.I mean, this is kind of
the way the stock market works,right, I'm either betting the Phillies or
(14:46):
I'm buying Amazon stock. It's theexact same thing from a transactional perspective.
And so that's how we started toget started. We build a free play
version of it. We went throughthe Comcast Technology incubator, Power by tech
Stars. We raised about three hundredthousand dollars and it wasn't until late twenty
nineteen early twenty twenty, we reallyraised our first round of capital, which
(15:09):
I didn't announce until twenty twenty one. That allowed us to go and get
a new Jersey license, build outa formal team, build out a former
set of rules and policies, andactually, at this point, I'm like,
Okay, I might have real businessidea here. I've raised some capital,
I've got some people involved. Igot very lucky to find just like
incredible people that built almost all ofit. So, yeah, that's how
it got started. Excellent stuff.Who was the main person that you were
(15:31):
bouncing this off of. It's agreat idea, great concept. Obviously you
know what you're talking about. Wecould all just hear it right now.
But was there someone that was reallyinfluential? Was it your father? Wasn't
a professor, someone that really madeyou believe that your concept is true?
So I think, you know,having to support of my parents, like
I would not be anywhere without them. My mom was actually professor at Drexel.
(15:54):
She was at the time the directorof the fashion department the west Fall
School of Arts and Design. Greatprogram, fantastic program. Yes, yeah,
I knew a couple of girls thatactually went to Drexel. Yeah,
they're super proud of that. Theywin awards each year. I'm blown away.
But what they're doing and that,well, that allowed me to go
to school for essentially free. Sothat privilege right starting off not having student
(16:14):
debt is huge. Now that allowsme to actually try and build something and
not take a salary for an extendedperiod of time. So without that,
I'm not sitting here right without mymom. My dad, he works in
healthcare industry out in Chester County.He's sort of he bets on sports a
little bit here and there. Buthe was again someone that was just like
(16:34):
really supportive and just said, Ithink you should try chasing this. I
don't really know anyone in the industry. I don't I can't really help in
that regard, but I can helpyou by lending my love and support.
And that was huge, man,that that was the most legitimizing thing.
I remember the day I pitched thisto my dad. I'm like, I
want to do this, I wanta year to do this, and I
showed him through the screens and like, just like his unrealistic support for me
(16:59):
is is you know, sitting sittinghere now thinking back had to be unrealistic,
but at the time, in themoment, that was so validating for
me, and that's what allowed meto really get started. And what I
did is I just went on LinkedIn, I went on Twitter. I reached
out to people. I said,I need to learn about sports betting.
I connected with Captain Jack Rufus,Spanky, all these sort of folks on
(17:19):
one side. On the other side, I said, I want to learn
more about how you build a stockexchange. I want to learn more about
I want to connect with people thatbuilt Noise, that built the Nasdaq.
And through all those sort of connectionsand just finding people, I started to
make connections and find, you know, turn one relationship into another and sort
of put one foot in front ofthe other. So then you're so you're
(17:40):
getting this thing built, and yousaid you went out and you raised some
capital. How much did you raise? So initially beyond the sort of three
or four hundred thousand dollars seed roundthat was really powered by tech stars and
comcasts. I mean, like imagineseeing comcasts as logo on your deck,
You're like, WHOA, Okay,I might actually have a real business idea.
Like again, so validating, notfor any real reason. But for
(18:03):
some person there decided that we thoughtthey were interested, they thought we were
real reason right, Yeah, it'ssomething. It helps you with the faked.
Do you make it? In twentynineteen is when I started to really
dig in get customer feedback. Ijoined a podcast called that This is a
Betting Podcast. Evan. I'm sureyou know Jake Williams pretty well. He
was in a pretty similar role Ithink over at at sport Radar initially and
(18:27):
then Points Bet, and I thinkhe was the COEO most recently of Points
Bett. Now I just think he'sdoing something new. How you doing,
Jake, Jake's awesome. You haveto get Jake on this podcast. And
so I went on that podcast,and at the time I didn't really think
much of it, but that gaveme a whole new audience, a new
(18:48):
potential network to connect with, andone particular person on that audience. His
name is David frohard Lane. Hecontacted me with a cold LinkedIn note,
you know, in Septembmber of twentynineteen. It said, Hey, you
know, I was a big marketmaking participant on all those electronic venues you
talk about all the time, andI want to pivot over at sports betting,
and I want to do the pricingfor you as a venue in sports
(19:12):
betting, and just so as luckwould have it, I was already traveling.
He lived in Chicago. I wasalready traveling in Chicago once every two
three weeks because I realized the wholetrading industry is in Chicago, particularly the
commodities trading industry. And so thiswas probably September early October of twenty nineteen.
I met him in person, andright away in the first five minutes,
(19:33):
I said to myself, I don'tcare what I'm doing anymore if I
need to just drop everything and jointhis dude, Like that's what I'm going
to do, because this is oneof the most brilliant minds I've ever heard,
and what his vision for sports bettingaligns so much with my vision.
And ultimately, through some diligence,I remember he called Rufus and did like
a reference check. I still needto buy Rufus like a case of wine
(19:56):
when I can ultimately afford it,and give Rufus a case of wine what
rufe has said in this sort ofphone call that David and Rufus had And
then in May of twenty twenty,we did a ten million dollar round led
by David's firm that he founded withhis co founder Brandon. They were at
this company called get Co, whichwas the first real market maker on electronic
(20:17):
venues revolutionized trading. They started acompany called dl Trading, and d L
Trading became our first managed trading serviceprovider and our first investors. So then
we were sort of off to theraces. So I'm just if I'm hearing
you correctly. It's all started bybeing on a podcast. Yes, So
there you go. It's incredible.That's why I'm here. I want the
(20:40):
sound call to be a perfect pross. So you're out there listening to this
number. No, it's it's great, and that's the look. It's definitely
getting a little bit more crowded,but you know, with the LinkedIn and
the social media and definitely pre pandemicmore than anything, with the birth of
all the legalization of sports gambling,like, there was plenty of opportunity for
(21:00):
anybody that had interest, whether it'ssomething like you had in your mind or
something to the people that want tocreate content from A to Z, and
there are people, there are brightminds all over the place, and that's
why I one of the reasons whywe wanted to get together to shine the
light on bright minds like yourself,Alex. And this is a great conversation.
Let's keep it going. I wantto ask you. Of course,
(21:22):
we had the pandemic, So hereyou are. You got this great idea,
you just had an unbelievable dinner intwenty nineteen, were able to get
all that capital, and then thepandemic happens. What happens next for you?
The pandemic happened. That almost putthe entire sort of fundraise and at
that time the future of the businesson ice. We went through with it
because we knew where we're just goingto be building the next couple of years
(21:45):
to get a product. The nicething about technology is most developers like to
work from home, and so you'reable to do a lot of that sort
of remote and at this time,I think it's summer of twenty twenty,
the first line of production codes startsto be written. We cool story.
So David said, look, youknow we're gonna build this thing. It's
going to act a lot like astock exchange when it comes to like putting
(22:08):
bets together. Matching bets, andso we know someone at get go that
could be perfect. Why don't youtalk to him? He could console,
he could maybe, you know,if you're thinking about outsourcing this. So
I get on the phone with thisguy's name's John Ross. I never forget
it. I had this bag.If I wasn't eating all day I was
working, I was eating these peanuteminems. I'm just shove them into my
mouth. I'm listening to John Rosstalk and I said, look, we've
(22:30):
been linked up with NASDAK. Westarted talking with them at this point.
You know, they could build ourmatching engine. And he's like, ah,
you know I was the CTO atNASDAC. You could take their match.
How about this, I'll just buildyour matching enge. I'll come join
the team. And I just remember, like an eminem dropping out of my
mouth sort of thing, like whatthis is like if you are a market
micro structure nerd like I am.John ross Is. He is, first
(22:52):
of all the most humble guy you'veever met, but he is like one
of the founding fathers of electronic trading. A lot of the stock exchange software
out there running in production right nowat this moment in time, built by
him. He was also one ofthe founders, one of the core principal
engineers at Atari. So he builtSimCity. So when I tell people John
Ross is the CTO of Nastec,people are like, whatever, Oh,
(23:15):
but he built SimCity. Oh mygosh, I love that game. Yeah,
exactly, that's cool. So soat this point it was probably six
or seven of us we started tobuild this out. We went to Ballet's
in New Jersey. We had anagreement to do market access that allowed us
to when we ultimately got it certifiedby the regulators, to launch in that
jurisdiction. And that was a riskthey took, right because at this point
(23:38):
you still have the Unibets and thebet Ways, a lot of European companies
that have decades of sports spending experiencecoming into these markets. And we had
a pitch deck like six people anda vision, you know, And so
there was a lot of risk thata lot of people had to take to
get this off the ground. Andit's just as I look back, just
like a ton of great luck,right that you're able to look back and
(24:00):
say, well, this is abig break, this is a big break,
This is a big break. Ithink so many times people try to
attribute everything they've done and accomplish tolike scale, when in reality, to
me, it's like a vast majorityof it is it's just like right place,
right time, good luck. Ithink it's a mix though, right.
I mean, it's it's getting thosebreaks, but it's also teeing yourself
up to get those breaks. It'syou know, meeting with the right people.
(24:25):
It's sending out these LinkedIn messages thatyou talked about, having some confidence
in yourself and teeing up those opportunitiesand then yeah, maybe a little bit
of luck and helping them see themacross the finish line totally. And also
the fact that, look, you'rebringing more to the table. There's always
that introduction, there's always that nicemeeting, and then people know, okay,
(24:45):
I don't really not so much wastemy time. But at the same
time, it's like, hey,obviously he's got something here. This guy
right here could potentially expand my horizonsor take something up another level. And
that's clear as day talking to youright now. A couple more questions as
far as what's what's sports you Obviouslyyou talked about the pitch deck, and
(25:07):
only a few people. The pitchdeck has definitely expanded a few chapters since
those days. How many people areworking for you right now? So we
have thirty five full time employees.We had scaled up the team, probably
in my mind looking back, abit too fast. Obviously, capital became
a lot more expensive in twenty twentyone twenty twenty two, and we had
to do what every team had todo, right, try and scale back
(25:27):
your expenses as much as possible withoutultimately affecting employees. The number one stakeholder,
it's port trade. Unfortunately, youknow, like a lot of other
businesses, headcount was affected as well, and so we had to bring the
team back. But if you've seenRocky, right, there's that scene where
Mick gets out there and Rocky's outof shape and Mick puts out of chicken
(25:48):
and Rocky spends like three minutes.That's a real scene. Like I'm a
movie like nut and that scene waslike real Rocky. Sylvestiu Stalone was like,
are you actually going to have mechase around of live chicken? And
yes, and that was him actuallytrying to catch the chicken. So we
had to sort of cut weight.We had to do with everything we had
to do to sort of survive.And the great thing now is we're now
(26:10):
ready to take on like mister tthyou know, round two sort of deal.
We're I think going a scale intostates four, five, six and
still be in that headcount of aroundforty, which when you look at other
operators you have, some of ourcompetitors have three thousand, four thousand employees.
We have to try and find todo a lot more with a lot
less, and so we had totake those steps to sort of set ourselves
(26:30):
up for success. But I reallydo feel like I use the term fighting
weight. I think we are kindof of fighting weight now being at thirty
five forty people. And you saidyou're going to be in hopefully four five
six states coming up soon. Yep. So we're in an application process with
a couple of states. I'm abig believe in karma, so like,
(26:51):
I don't want to say, oh, it's going to be state ex ra
y because you know, you guyshave such a big reach, you know,
Gosh forbid, there's a regulator thatsays, oh, you think you're
coming to my state? Interesting?Interesting, I thought I've made that decision.
So so because I'm a believing carmI can't you know, announce it
just yet, but we're working ona couple more, hopefully for the fall,
and then in twenty twenty five we'dlike to get into another three or
(27:14):
four markets ahead of football season then, because as you guys know, football
season is when you acquire your mostvaluable players money to be made exactly,
So just real quickly take me throughgoing back to when you talked about the
market making, and you've got someentities on one side that are you're essentially
pairing up with people that want tomake wagers on one side or the other
(27:37):
of a line, and then whatdo you do? Are you just taking
a cut? Basically? Yep.So we if you're looking at our app
for the first time, you seeall these great prices, those include what's
called a commission, and the commissionis simply a small percentage of the profit
you make on a winning bed.So you might see minus one oh four
minus one oh four, the pricingis actually minus one of two mone too,
(28:00):
but adding in our two percent commissionand being as transparent as possible with
you so you can actually compare thatall in price versus the price of FanDuel
and draftings in ESPN and whatever thatincludes that commission. So and then we
also share revenue with these managed tradingservice providers, so they're helping us put
these prices up, and then ultimately, when those prices are taken down by
(28:21):
virtue of customers placing bets, wedo a revenue share on the back end
with those licensed partners. Gotcha.So this is it's it's complicated behind the
scenes, but from a player standpoint, it's still what you see is what
you get. Here, here's thebet I'm making, and here the odds
I'm getting on it totally and someof the cool stuff we've been seeing over
(28:41):
this summer is like we've really doveinto golf. You know, this is
not the most exciting part of thesports betting calendar, as I'm sure you
guys know and appreciate, but golffor us has been huge. And what
we're re really differentiat on golf islike you can get coming into Sunday fifteen
twenty thirty fifty even one hundred thousanddollars down on some prices that just mop
(29:03):
the floor with everybody else. Andso when you place that bet on sport
trade versus a competitor. You mightget fifteen to one on sport trade,
whereas the competitor might be offering tento one. We think about it,
that's a fifty percent odds boost,right, fifteen over ten, and so
I think we're learning on how bestto pitch that to players. Players haven't
been as price sensitive as you'd think, but players are very boost sensitive.
(29:26):
Oh my gosh, I have afifty percent odds boost. So we've been
sort of exploring do we sort ofexpress our price as the FanDuel price plus
a boost, which sounds a lotmore interesting than just fifteen to one versus
ten to one. So that isone of the areas where we have really
differentiated is on golf. You willsee we have a brand new feature on
our inn app called the Tape whereyou can see a live feet of every
(29:48):
single bet coming through in real time, one hundred percent transparency. How great
would that be for fandel Hey,what's being bet on right now? We
give you all that in real time, And even yesterday we have players betting.
I think the top bet it wasa close to fifty thousand dollars golf
bet between before round four of theJohn Deere Classics my guy Davis to win
or what was bet? Someone bettwenty thousand on Davis to win, so
(30:10):
that was a winner at plus oneoh six. And then someone bet I
think fifty grand to win like twogrand that Ctpan wouldn't win. That's another
cool advantage of the sports rare.You can bet no. So both of
those, both of those won,almost like short selling exactly, almost like
short selling. So it works inour system as if you're shorting. But
when you're looking on the app,pic just says, Okay, you can
take Ctpan at maybe forty to one, and you could take him not to
(30:33):
win at like minus forty five hundred, so you're laying forty five to win.
One. I wanted to follow upon the golf and you kind of
just went into it a little bit. But why and I read this in
an article that you were being interviewed, I think last year on the Biz
Journal. Why golf over the othersports? When NFL is obviously it controls
all even college football football in general, maybe soccer with the global appeal,
(30:55):
Why golf golf, I think isit really draws into some of the huge
benefits of sport trade. One whenwe talk about like minus one of four
versus minus one ten. It doesn'tseem like a lot to most players,
right, Oh, I'm betting tenbucks. It doesn't really matter, which
is true. But when you translatethe better pricing that we have on golf,
you go to that same example,fifteen to one versus ten to one.
(31:18):
That's almost the same difference as minusone of four versus minus one ten.
But because it's a longer shot inthe way the American ods sort of
tick table and structure works, itends up feeling like a lot more.
That's one and two, as thename suggests. Sport trade. So the
cool thing about sports trade is thatyour bet always has a liquid fair value.
So if you place one hundred dollarsbet on your favorite sports book on
Davis Thompson round one, at theend of round one, the cash out
(31:41):
might be six hundred dollars because hehad an incredible reverirse round. On sport
Trade, it's gonna be like doublethat, right. And so because golf
has like some nice stop start,stop start, you have four days think
about the British Open coming up,Bryce and Deschambeau, and to put my
thousand dollars there. On sports trade. It's, you know, eight to
one versus draftings at six to one. It starts to look like a huge
(32:04):
difference because now the cash out valuethat same a thousand is so much more
on sports trade. So that's whywe like to focus on. Like,
so if I think that the Philliesare gonna go up big and then they're
gonna the bullpen is gonna blow it, and then they're gonna win it.
In extras, I can buy thePhillies pregame, sell them after the sixth
inning, and buy them back atthe start of the tenth exactly. Yeah.
(32:25):
In fact, the very first tradethat was made in Iowa. My
dad's also a huge Phillies fan.He is very much a square more recreational
sports better. His biggest bet todate was maybe fifty bucks. He came
out to Iowa, went to theField of Dreams to place the burn of
bet it is. Have you beenthere? I have not your baseball guy,
(32:45):
Dyersville, Iowa. It's as mustall right, Like it's a must.
It's like it's part of the it'syou know, the homage you pay
the game you go for one ofthe major League baseball games. It just
go. We went to one ofthe Major League Baseball games. My dad
takes one week off a year.It happened to be that week in twenty
twenty two. So we did thatand then we went back. I actually
had to Anthony our CFO, andI had to test the border of Iowa
(33:07):
ourselves, someone on the team andto do it right. Thirty five people
CEO and CFO. That's our choicegoing on. I widget off going to
Iowa exactly. And so we actuallytested the border and we made our way
to Dyersville and we announced actually acool promo we did. We drove sixteen
hundred and ninety nine miles testing Iowaborder. So we gave every player ten
percent back on the first way,dro up to sixteen hundred and ninety nine
(33:29):
bucks. And then we went backto Diyersville a third time to do this
first bet. And so my dadput he bet the Phillies and I want
to say close to nineteen to one. He put five hundred and fifty to
pay ten thousand, and that fivepoint fifty we were just looking as worth
about fourteen hundred right now. Andso look if he plaid that fate,
(33:52):
same five point fifty on DraftKings thatmight be worth one thousand dollars right now,
because what competition did they have toreally give you a great cash out
price versus an our system. Youknow that there's a competitive element that produces
the price. You see, that'snot only the price you can pay to
get into a bet, it's alsothe cash out value of getting out of
a bet, and so that actuallystays open. So as the hopefully Phillies
(34:15):
make their World Series run, hisfive hundred and fifty dollars that he initially
put in is going to have alive value, you know, three to
two, bottom of the ninth inninghopefully against the Arizona Diamondbacks again, and
hopefully we get it done and don'tlose two straight games at home. But
it's kind of a fair liquid value. The other really cool thing you can
do on sport trade that you can'tdo anywhere else is he could say,
you know what, I want totake my five point fifty that initially put
(34:37):
in betting on the Phillies to winthe World Series out, put that back
in my pocket and let the restride. So you can actually sell some
of your bet in a very intuitiveway on sport trade. So yeah,
as the name suggests, we reallywant to teach players that, like,
hey, when you place a bet, it has a fair liquid value,
and from there you can you cancash out some, you can cash out
(34:57):
all, you can double down exactlyas you suggested. That's why the tagline
stop betting, start trading exactly.It makes perfect sense. Love it,
absolutely love it. Great story.All right, Well, I got a
couple more here for you, Alex. First of all, just as far
as with the introducing New states onlinebetting apps only permitted to strike a partnership
(35:19):
with a brick and mortar casino,is that still will that change? Is
that, you know halting you inany way talk a little bit about that
if you want to. Mind.So, this is an area where I'm
getting a lot more involved personally,is on the legislative front creating opportunities for
sports trade. So all in all, you know, when you think about
sport trade from a business perspective,for every one hundred dollars of wagers that
(35:40):
we accept, we probably keep aroundtwo bucks, right, So that would
be a two percent hold. Asit's known in the industry. Other competitors
they want to be in the tenpercent range, right, And so what
we're starting to do with select states. Pennsylvania is going to start to be
chief among them. Is We're goingto try and create our own pathway into
the market and say, look,we have a real value to your ecosystem,
(36:04):
mister or missus regulator. We're actuallyreally an interesting product to a lot
of players that are limited or bannedat some of your other venues, and
we want to be a regulated alternativeto the plethora of unregulated options that those
players in let's say Pennsylvania are currentlyplaying on. So we went and actually
pulled our New Jersey players, andour Iowa players and our Colorado players.
(36:27):
Two thirds of our audience has placedan offshore bet in the last twelve months,
which means no tax, no regulation, no oversight, and that volume
from those players has come down.That offshore volume has come down by virtue
of using sports trade, which meanssports trade has a real benefit to the
ecosystem. Less so from a taxcreation perspective and more for why do you
(36:50):
regulate sports betting in the first place. You want to provide a regulated alternative
to the unregulated options, as aformer director of the NJDG Daveybuck has amously
said, And so what we wantto do is come to Pennsylvania and say,
look, we can't pay thirty sixpercent tax, we can't pay ten
million dollars a part of the casino. To do that, we need what's
called an innovator's track license. Andso in some of these states we're going
(37:12):
to be introducing legislation that brings inI mean, how great would sports betting
could be if you can bring inmore competitive options that don't have to go
through these huge barriers and entry.Some states Iowa, Colorado very business friendly.
Other states Illinois, Massachusetts, Pennsylvania, New York, we're going to
need to create a pathway for businesseslike sportshow to come in. And that's
(37:32):
where I get really excited, asyou can probably tell. And I like
to spend a lot of my timebecause when I connect with a legislator,
they're like, you know, thatmakes so much sense. I love what
you're doing. It's so pro player, it's so transparent, it's so low,
you know, low costs, andyou're actually not competing as much for
the DraftKings player as much as you'rebringing on the player that Draftickings doesn't really
want. And so sure, yeah, you know what you need a different
(37:57):
set of rules to come into mymarket. You're still going to be regulated
by the same regulator. You're stillgoing to have all those same sort of
regulations you need to follow. Butfrom a cost of vetory perspective, that
totally makes sense. So to answeryour question, Sean, yes, there
are going to be some states thatwe're going to create this sort of innovator's
track and we're starting to find acoalition of like minded operators that say,
yeah, I can't pay the fiftymillion dollars in New York, twenty five
(38:21):
million dollars in New York, thetwenty million dollars in Illinois for mobile only
license, but I can come inand I can still create tax revenue and
more importantly, bring these players backinto the regulated market with this innovator's track
license. I think it would doa world of good for all these regulators
to hear exactly what you just said. It just it makes a lot of
sense. And one of the biggripes you see, whether it's not online
(38:44):
and no one's friendly online, weget that, but a lot of gripes
there is the limiting and it's realand you just brought up offshore one thing
to a point with all love andrespect not guaranteed either, right, you
know that sometimes you deal with thoseoffshores and it's like, hey, wait
a minute, we're my money,you know if we've heard of those bad
stories. So nobody really wants todo business offshore, let's just put it
(39:05):
that way. And that's something thatthe industry is totally aligned on. I
mean, you're getting seasoned assist letterscoming from state regulators now, at some
of them more high profile offshore operators. The American Gaming Association's been all over
this for years. So I thinkif there's any issue that the industry can
can unite on, it's, youknow, limiting and preventing people from wagering
(39:29):
offshore, because, as you guysboth said, when you combine a lack
of any tax revenues with a lackof any real enforceable regulations, you know,
that's not really a winner in anyone'sbook. Yeah, and I don't
even think to your point, Sean, that players want to play offshore,
right, they want to play wherethey can deposit with PayPal and everything simple
and easy, and they it's thisvery simple win laws statement they can use
(39:52):
for the irs right to pay taxesbecause a lot of these offshore players are
the players that don't do the samegame parlays. They're a little bit more
of the older school, bigger dollarsort of mainline meat and potato markets.
Player that would love an option thatoffers minus one h five as opposed to
minus one ten, would love tobet five thousand dollars as opposed to one
hundred and fifty dollars or whatever they'restake limited to. So this is where
(40:15):
we can come in and even bean ally to some of these larger operators.
Look, you don't want these players, right, That's okay. If
you really want to go after theoff shores, you can say, look,
sport Trade is part of our coalition, and they'll take all these players
that we don't want. And that'show mister or missus regulator, you can
guarantee that these players stay on shore. We may not want them. Our
(40:35):
business models a little different, butsports trades set up in a way that
they can keep these players in theirregulated market, and states like Massachusetts have
had roundtables on player limiting. It'sgoing to start to become more prevalent,
and the answer isn't to force anoperator to accept all players, right.
The answer is to create a competitiveenvironment so there's enough competition so that there's
different regulated options trying to go afterdifferent parts of the regulated market. That's
(41:00):
the answer to the question. Andagain when we talked to a legislator,
they're like, this makes so muchsense, Like this isn't this isn't something
crazy idea. Yeah, you can'tpay the ten million in it casino,
Okay, let me work with you. Yeah, gaming is really tough.
I can't guarantee it's going to passin this you know session, or even
next session, but let's stick withit. This is something that ultimately is
going to make sense in our market. Fantastic stuff. Alex Kane, once
(41:22):
again the CEO and founder of sportTrade Stop Betting, Start Trading. Check
them out online. You can downloadthe app right now. There's a text
message I sent it to my phonelast night Boom, I got the ten
percent cash back on all my wages. Right now I'm figuring out a little
bit more about how this app works. Of course, great conversation here.
Get Sporttrade dot com online as whereyou can find them. Alex. Excellent
(41:46):
stuff, great insight information across theboard. Number one. Number two.
I want to get you out ofhere on this one though, a little
fun one. You did say you'rea movie buff and you brought up Rocky,
so you can't answer Rocky. Butthe Greatest Sports Movie to you?
That's where I'm at. Yeah,that that one tugs at the heartstrings.
(42:06):
Man, you know with the dadplaying catch. If you build it,
they will come when he saves thedaughter which she chokes on the hot dogar
are you kidding me? Niagara fallsover here? That's good, that's good,
great stuff. What is your answeron that one? What's my answer
on the greatest sports movie to you? Yeah? Just my favorite sports movie.
(42:28):
You're flip into the channel you seeit's on. You gotta watch it?
Oh man, stump them? Yeah, seriously, I don't this is
I don't know if it's my favorite, but it's for some reason. It
makes it pause me any given Sunday. It's fantastic. It's a good it's
a great movie, Jamie. Yeah, I don't know. That's that if.
(42:49):
That's definitely one that I'm not gonnanot gonna skip over if it's on
TV. I like that. Rudy'sanother good one too. You just learned
like, listen, it's all aboutattitude. It doesn't matter. You could
lack all the physical gifts in theworld, but if you're willing to outwork
ever, this man's standing. Sothat is another movie. When that comes
on, you're like, I haveto watch it, watch it. Whatever
I plan on doing is done,whether it's Field of Dreams or or Rudy,
(43:10):
Like, you gotta watch the movie. Yeah, I know. He
was the main character in The Rock, which was a show on Fox,
and it was the janitor in inRudy. And when he goes and sees
him and watches him and he's claughing. That's another one. Tugs at my
heartstrings. Alex, great stuff man. Can't thank you enough for stopping it.
(43:30):
Continued success once again. We'll bechecking out everything that Sport Trade has
to offer and can't wait till it'slive right here in Pennsylvania. All right,
little post pod recap as we alwaysdo here on Behind the Veig Episode
two. Evan, what a greatconversation right there, obviously with Alex Kane
from Sport Trade. A few thingsthat just hit me right from the jump
(43:53):
is the first, it's clearly somethingdifferent than the other operator. The other
sports, no question, you know, and I get it. It's it's
it's it's a it's a crowded area, right for lack of a better term,
when in this sports gambling ecosystem,and I'm sure that there are a
lot of people that have an ideaand trying to bring it and make it
(44:15):
happen, But there's got to bea different lane for people like Alex and
sport trade right. Like to me, I understand DraftKings, FanDuel, you
know, ESPN, BET, allof the big time operators. It feels
like they want to go about ita different way, and they can because
(44:36):
they have so many people and somuch money to market. And I understand
it's probably not endless, but atthe same time, it's definitely not on
their level. So from the legislative, which is a whole nother avenue that
I need to learn more of.But in Alex and that short time we
had him, he made it understand. I thought he spoke the language real
clear for people like me. Sohope is that when he gets in front
(45:00):
of regulators, whether it's Pennsylvania,whether it's Illinois, whatever state it is,
you know, I hope that theylook at him and they hear him
and take him serious and and andultimately give him the green light because it
seems like it's different than the othersports books and when you're not targeting some
of the people that are big fishor the sharps, and it's like,
(45:21):
hey, that's somewhere that we wantto go down. I'm with that man.
Like that's one of the things thatjumped out of me in that conversation.
Yeah, I just I love howhow driven he is. Obviously an
incredibly bright guy, but with aphenomenal idea that he's now seen he's seen
through to reality. Right, they'rein they're in three states, he said,
(45:42):
they're going to be in more.And that takes a ton of hard
work, both, you know,on the on the fundraising side, on
the development side. I mean,you heard him talk about how what it
takes to get this off the groundand the pandemic. Yeah, yeah,
no question. And but and Ithink it's great. It is a it's
a differentiated product that's out there,and I think it's a wonderful addition to
(46:07):
to the choices that people have outthere. It doesn't mean that you can't
have other sports betting accounts, butyou know, if you're in a state
where where sports trade is legal.I think it's it's a wonderful option to
be able to bolt on as ayou know, as a better, whether
you're a casual better, sharp better, or sort of anything in between.
(46:27):
And uh, you know love thefield of dreams, Yes, field of
dreams. Bit I hate I hateto say that I might have like caught
you off guard in the middle ofthe podcast, But did you draw a
blank on that question? I'm wondering, not a blank so much as I
think. You know, look,I'm started thinking of one hundred movie.
Well I'm years old, and sowhat was your like favorite sports movie?
Could be like the you know,the the Tier Jerkers that you guys menage.
(46:52):
I mean I think if you askedme, like, what's my most
nostalgic sports movie, probably like TheMighty Ducks, right, I mean that
was It's pretty good. That waslike, you know, I was a
kid, and I think I waslike the age of those kids when they
were filming in I'm like, oh, I can kind of cause I relate
to this even though I couldn't playsports at all. But you know,
like so so I think it's adifferent it's a different question. It's like
(47:15):
what's your most nostalgic sports movie versuslike what's the one that you like pause
when it comes on TV? Andnot necessarily one of the same and you
want to you know, you don'twant to give that that same answer,
which you know the movie, Somy mind, obviously, I'm like,
Okay, Field of Dreams, I'mright there. You know. One of
the movies that I always bring upis Miracle, Like Miracle was a great
movie. It was a great movie. Now and Kurt Russell, as far
(47:37):
as the coach is concerned, likethat was herb Brooks. It was unbelievable.
So great movie. That's one thatI always throw out there for people.
Rudy, Rudy that doesn't get alot of love. I mean,
look, there's a tough right.I mean, you can go down like
the major league path. Yeah,we can talk about basketball with like the
South Park creators, right, Imean, there are a lot of different
paths. We can go cool runnings, I mean, so you know running,
(47:59):
Oh yeah, that's grateful by yeahyou like that. So I mean,
right, like it's this this isnot a one size fits all question.
I think they're they're this is thelawyer answering me. But there are
a lot of asterisks that come withwith answering questions like that love that all
right? And finally, let's puta bow on this episode. Fantastic guest
Alex Kane from sport Trade Philadelphia sportsfan, a guy that's from here,
(48:22):
Trexel Zone. How cool is that? And and obviously a gentleman that's going
to be leading to charge for somebodyif it's not sports Trade in the future.
Uh, I can only imagine thepeople that are gonna knocking on his
Now. I've known Alex for awhile. He's a great guy. Uh
what do you say an eight handicaphe told us off to. Yeah,
(48:43):
he's uh he a handicap. Yeah, that's that's my per whole handicap.
I think so it was this weekend, that's for sure. Well, Evan,
another fantastic episode of Behind the Veigand for the people that might have
missed it, you can catch usat FOXPHL Gambler dot com download all of
our podcasts there. Once again,this has been another edition of Behind the Vig.
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