Smarkets launches its social assault on the betting world

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Smarkets, a startup which launched into private beta soon after presenting at our annual GeeknRolla event last year, has today launched publically.

Smarkets is a ‘social betting exchange’ which is launching initially with football/soccer bets covering UK football, the Champions League and the World Cup, but has plans to offer bets on the UK general election shortly. The idea is to bring a social and hightech mentality to the traditionally slow-paced industry of gambling. Better late than never I guess. It had planned to launch in late 2008.

The main competition Betfair is worth $3billion and there are other betting exchanges including intrade, tradesports, and betdaq. None are built around social elements.

At the same time it’s emerged that Stefan Glaenzer (the first investor and former exec chairman at invested in Smarkets as part of an angel round which also included an unnamed MD from Citigroup. The round was undislosed but it believed to be in the low six figures. From what we know, Smarkets has a declared $410,000 in backing.

The team includes Russ Garrett (one of’s first employees), Bradley Wright (former front-end development lead for Yahoo! Answers), and Alex Lee (former UX lead at Yahoo!).

Smarkets is based in Clerkenwell at the increasingly hot startup space known at White Bear Yard which also houses Picklive/, Timetric,, Rummble and Mendeley.

  • Nigel Eccles

    Congrats on the launch guys.

    (BTW Mike – Tradesports closed in 2008. Check the link)

  • Jan

    Great team, rock on!

  • Joel

    The crucial thing with betting exchanges is market volume – without the largest number of punters they’ll never be able to offer the best odds.

    Betfair’s competitors haven’t been able to wrestle away a huge amount of share in recent times, so I’m a little sceptical about whether the addition of ‘social elements’ to a new proposition will offer much more success.

    I also think it’s a tricky balancing act to dumb down a betting exchange to give it a ‘social’ feel (and so newbies get the hang of it) while making it serious / minimlist enough to encourage real volume from the pros.

    Good luck though!

    • Isofarro

      “The crucial thing with betting exchanges is market volume – without the largest number of punters they’ll never be able to offer the best odds.”

      As I understand it, the odds are determined by the users. There’s no bookie setting the odds.

      In that respect, the odds are better than a bookies because there’s no margin, because there’s no bookie.

      It’s a fascinating concept.

      • Joel

        Users compete with other users to obtain the best possible odds – if another exchange has more users, the increased competition in that market will result in more favourable odds.

        Therefore you’ll always default to the exchange with the most volume / liquidity / users to get the best value.

        Smarkets is a long way behind in user numbers / market volume, and I doubt will ever catch up with even the second-tier of exchanges like Betdaq, who in turn will probably never catch up with Betfair.

        Also, while there’s no traditional bookie’s ‘margin’, there is a flat rate of 5% commission on all profits, which is steeper than Betfair’s tiered system – the more you bet, the lower your commission. Something to consider?

      • Isofarro

        (I am not a gambler, and I don’t play one on TV)

        I agree with your point that gamblers gamble, so the social aspects are not a priority, and in circumstances too revealing. (Actually, the possibilities of gamblers playing arbitrage between a bookie-based betting, and casual betting sites could be quite interesting – for seasoned gamblers)

        Smarkets strikes me, in my opinion, as a casual gambling site. Much like the divide between gaming, and casual gaming. The hardcore games don’t want to be playing Arkanoid clones on Blackberries, but out there, loads of people are playing these games. (Also, Farmville.)

        As to visitor volume, yes you have a good point, social ‘user-generated content’ works much better when there is a sustainably large audience. The challenge for smarkets is to get to that tipping point.

        Seasoned gamblers will go to where the price is best. They will probably perform the intermediary role between two types of betting avenues, balancing out the odds (taking into account the differences between margins and commissions). Tiered commissions sounds about right, I wouldn’t be surprised to see smarkets going down that road as their audience grows.

        (Excellent comment BTW, Joel)

  • Pierluigi Buccioli

    None of the other betting exchanges and betting sites in general are built around social elements for the simple reason that gamblers want to gamble not socialize.

    Other than that, as Joel said, market volume is fundamental for a betting exchange and market makers (those who provide liquidity to the exchanges) don’t want to be known, so adding a social element is not going to help.

    Next please…

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