Smarkets, the London-based social gambling startup, has announced that it’s seen over £1 million traded on its ‘betting exchange’ since it publicly launched in February. The site, which competes with the likes of Betfair and to some degree intrade and betdaq, lets users set their own odds and bet against each other before and during events.
The company has also revealed that it’s finally going to expand into horse racing. Citing the poor user experience of existing offerings, which he doesn’t directly name, CEO and co-founder Jason Trost says that Smarkets made the decision to take their time so that they could get “horse betting right”. That’s likely a coded reference to the challenge the startup faces jockeying for position in light of the much larger Betfair’s pending IPO, which could be valued as high as £1.7 billion.
In fact, the much younger Smarkets is now marketing itself as the “simple, social alternative” to its older rival, an opportunistic but probably smart move. “By offering a better experience to users, we believe that we can build on our early success and become a powerful alternative to more well-established betting exchanges such as Betfair”, says Trost.
As for that figure of £1m traded, Smarkets says that it’s particularly benefited from the summer’s two biggest events in the UK – the World Cup and General Election – which have helped the site rack up around £20,000 worth of betting per-day. Smarkets charges a 1% commission per bet compared with Betfair’s 5%, so that’s roughly £5,600+ per month, but says that the move into horse betting should see it turn cash-positive.
The interest seen in betting on politics seems to have taken the company by surprise too: ‘Since then we’ve been discovering that there is a huge appetite for betting on politics and current affairs, which we’ve been quick to capitalise on”, says Trost.
Smarkets was founded in 2008 by Trost and Hunter Morris (CTO) and is backed by private European investors, including Stefan Glaenzer (the first investor and former exec chairman at Last.fm).