Before kickoff of the Super Bowl, an online sports betting futures ticket on the Philadelphia Eagles to win the NFL championship that was purchased Week 1 of the NFL season for $100 was worth, in fair-market value, about $1,238.
When Kansas City’s Harrison Butker kicked a 27-yard field goal to hand the Chiefs a 38-35 win, that Eagles futures ticket was worth exactly zero.
WagerWire, a startup in the sports betting industry that calculated the Eagles odds with data from BetMGM Sportsbook, wants to put the type of liquidity in the futures market — both for long-term wagers and for far more shorter-term bets — that will provide bettors an opportunity to realize profits on wagering decisions that were, for the most part, fairly astute.
“There’s that lightbulb moment where you think to yourself, ‘It’s in the money,’ you placed a good bet. You did your job; you picked the team that got all the way to the end and now they’re in this match-up and now what do you do with that,” said WagerWire co-founder Zach Doctor.
Going back to the Eagles example, someone holding a futures ticket on Philadelphia might want to somehow realize the implied value of the bet before or even during the game, but how to collect?
“Traditionally, you’d hedge it,” Doctor said. “You’d put a big bet on the opposite side. But that requires liquidity to do so and sometimes if you bet $50 at the beginning of the year, you’re not going to want to put $2,000 on the other side. Or, you don’t even have the ability to do that. You may have placed your bet in Las Vegas and flew home from your trip and maybe there’s no local casino to place the (hedge) bet.”
WagerWire Looking to Create Marketplace
What WagerWire hopes to do is create a marketplace of sellers (bettors who are holding promising futures tickets) and buyers who want some of that action.
To be clear, some sportsbooks already offer “cash-out” options that allow customers to do exactly that — cash out of a futures bet for some amount — but WagerWire founder Zach Doctor contends customers are often being offered short money and, in fact, the cash-out options are being offered for a limited range of bet types, and occasionally, are even pulled from the sportsbooks’ menu at a point when the ticket holder might want to cash out.
“The prices that they’re offering are very low,” Doctor said. “When we’ve crunched the numbers on what the bets are worth … and when you compare that to what the ‘cash outs’ are offering, it’s 50 cents on the dollar very often. The high end is 70 cents. So, we’ve set out to create this ability to sell your bet on the open marketplace and get the full fair value of your open bets.”
Along with offering sellers a chance to get a better deal in an open marketplace, WagerWire also plans to offer more flexibility, such as an opportunity to sell a portion of a futures wager so as to monetize some part of it and still stay in action with a remaining piece.
WagerWire Concept Still on Ground Floor
Again, to be perfectly clear, that is what WagerWire aspires to do. It is not a real-money business yet, and there are challenges.
Doctor is a co-founder of the company along with Guy Dotan and Travis Geiger. All three went to UCLA together and the company can be said to be based in California since that’s where the principals are located. They have raised enough seed money to engage a few in-house engineers, acquire appropriate state licenses, handle expenses associated with compliance requirements, and maintain an online presence with a website and through social media.
WagerWire has been a few years in the making but it has reached important milestones recently and more are in the offing. WagerWire has struck partnerships with sports gambling-related companies Wagr and Sparket, and it expects a rollout of its free-to-play app at least by April. The real money version is being targeted for the 2023 football season.
In the meantime, WagerWire has been working hard on social media to raise its profile and create a customer base-in-waiting with content such as videos and a helpful back-and-forth interaction as they counsel bettors on the theoretical values of their futures wagers. WagerWire even offers a bet calculator where folks can figure out what a bet would be worth on the open market.
Matching Buyers and Sellers
It’s important to understand what WagerWire is and what it is not. It is not a market-maker in the traditional financial-world sense. What WagerWire aspires to be is a facilitator of bringing together sellers and buyers, in essence, create a marketplace.
“We’re not really playing middleman where we buy the bets and put the liquidity into the system,” Doctor said. “We are matching buyers and sellers, but it’s not WagerWire buying your bet on the other side. … Maybe there’s a world where you could get someone to be like a true market-maker for us where you could put hedge fund-type liquidity up. But for now, it’s going to be genuine buyers-and-sellers on both sides, and we’ll try to incentivize people to just post their bets a lot.”
Therein lies the real challenge. WagerWire needs a critical mass of bettors holding wagers that can be viewed as assets with some actual value along with willing buyers who feel there is some value in acquiring those assets.
In the case of longer-term bets, like the hypothetical Eagles Super Bowl ticket mentioned above, there is a considerable amount of time for that selling-buying dance to play out. However, if the ticket being held by a seller is for a specific game that is being played immediately, WagerWire needs a critical mass of highly engaged customers who are willing to sell-and-buy on the fly.
The company plans a standalone website and a plug-in that would go inside a large sportsbook app.
Can the Concept Catch On?
There really is no telling what the runway will be for the concept to catch on. Certainly, there is already a segment of sports gamblers who would immediately be attracted to such a betting opportunity. For instance, consider March Madness. Imagine someone uses mobile betting apps to make a speculative futures wager now on, say, Duke to win the NCAA Tournament at +5000, meaning a $100 bet would win $5,000. And as the season progress, the Blue Devils get hot and that ticket appears to be less of a longshot with a juicy payoff.
Realistically, there very well could be Duke enthusiasts willing to pay some figure higher than $100 for the ticket. The seller of the speculative Duke wager could make a tidy profit on the $100 investment, regardless of what Duke does down the road, and the buyer, who may have some loyalty attachment to Duke, has a lottery ticket with some chance of cashing it.
Being a marketplace for longer-term futures bets is what Doctor describes as the “low-hanging fruit” for his company. But the plan to increase what is sometimes referred to as event velocity, in this case the selling and buying of more immediate outcomes — whether they’re bets on point spreads, money lines or over-unders — relies on attracting a sophisticated and highly engaged customer base.
“In that world,” Doctor said, “you do need a lot of sellers and buyers.”