Innovation of igaming’s products lines, value chains and services will be key theme at this year’s EIG Berlin Expo. Team SBC & EIG caught up with Smarkets Founder & CEO Jason Trost to discuss the values of producing technology in-house, product independence and innovation blocks and factors.
Smarkets is an online betting exchange platform challenging the bigger exchanges in the igaming market with its financial trading technology. Founder Jason Trost a graduate of Computer Science at Northwestern University and has a background in financial trading. Trost has built the business and its platform from scratch, and managed ongoing development for the past 5 years.
Smarkets has been listed as one of the European Start-ups to look out for by The Wall Street Journal.
SBC: Jason great to catch up, Smarkets has had a very interesting journey as igaming technology, shifting its focus from traditional betting exchange to focusing on professional betting services. Can you summarise your company’s journey for our readers?
Jason: Smarkets actually began life as a social betting exchange, finding a niche in a bid to increase the interaction between sports traders. We’ve since moved on to target the professional sector of the market, intending to utilise our main USP that is our industry-low commission rate and become the leading place to trade. We’ve always intended for our platform to be clean, slick and transparent for users and this ideology has not changed throughout our transition.
SBC: Offering a betting service geared towards professional sports bettors can be a complex task. What key dynamics lead the development of your product when targeting these customers?
Jason: Value is key for professional sports bettors and the commission charged in the industry borders on extortion. Thanks to our industry-low rate, which is only applied to net winnings, we offer the best odds to our customers. We don’t have a premium charge here at Smarkets, meaning our customers can happily trade with the knowledge that profitable accounts will not be punished by a higher commission rate. We feel this is vital when targeting the professional sector. Furthermore, you’ll find no casino, slots or sportsbook on our site. Our sole focus is the exchange and we invest the entirety of our resources to develop our platform’s performance, usability and trading features.
SBC: Having developed your product from scratch, what corporate competencies do you believe your company has gained over competitors who will likely be using third party licensed betting software?
Jason: We have a great team of developers here at Smarkets and we’re proud that the platform has been built in-house. Software for a betting exchange is extremely complex, but by developing the product from scratch, our team have a complete understanding of this complexity and this is definitely one core competency that we’ve gained by not outsourcing. Furthermore, not having to liaise with third party providers means we can address issues rapidly and allows us to add features or improve the site within minutes of a decision being made.
SBC:.As a CEO of a sport betting operator, do you feel that a lack of independent product development has negatively affected the sports betting and igaming markets. Are products in our market becoming too standardised?
Jason: Yes. I think if you look at all of the different options on offer in the market, an argument that the sector is becoming too standardised can definitely be made. Many operators seem to have very verticle-heavy sites, which try and offer everything from sportsbook to bingo. Very few seem to be attempting to find a specialty in their service. Furthermore, I think the increasing levels of standardisation in the sector reflects somewhat on the audience too. We’ve found in the past that users can be very dismissive to slight changes in the service or the addition of new features, despite the various benefits.
SBC: With future legislation and regulations likely to impact all operators, what factors should operators in the sector be looking to prioritise?
Jason: It’s critical that high levels of due diligence are maintained in this sector, ensuring that AML practices are carried out to maximum effect and that staff are fully up-to-date with the latest training. Monitoring markets to identify and report strange and suspicious betting activity should also be prioritised by every operator, as well as high levels of co-operation with the various governing bodies to help eradicate insider trading and corruption within the industry.
SBC: Finally you are speaking at EIG Berlin, what do you want delegates to take away from your session?
Jason: I’m very much looking forward to speaking in Berlin. I’ll be talking about product development in football betting and how a company can stand out and differentiate themselves. Back in February we introduced a new feature called Dangerball, which managed our live football markets without the need for a delay. Since then we’ve been experimenting with different options in an attempt to optimise this management service, and this has now developed into a feature called InstantMatch which overs live betting without any delay. In Berlin I’ll be speaking about the different options that are currently available for firms to differentiate their football products, as well as the multiple benefits that can be achieved by doing so.
Jason Trost – Smarkets – CEO & Founder