Two years ago, the New Jersey Division of Gaming Enforcement approved betting exchanges, Prophet Exchange and Sporttrade. Since then, betting exchanges have becoming part of the New Jersey betting landscape. However, this will soon be changing as Prophet Exchange in New Jersey is Closing at the end of the month.
Sports Exchange did not state any specific reason for leaving the New Jersey sports betting exchange market. The only information on their finance is from the latest state revenue data from New Jersey. What we know is that company generated slightly more than $244,0090 in gross revenue from online sports betting in April 2024.
This is thanks to its collaboration with Harrah’s Atlantic City. This marked a significant increase from the $81,000 revenue recorded in February.
Prophet Exchange in New Jersey is Closing on May 28, 2024
Prophet, being the first provider of exchange betting in the state, has established itself as a pioneer in the industry. Unlike traditional sportsbooks, Prophet allows fans to bet against each other rather than against the house. In order to sustain its operations, Prophet takes a small portion of the players’ winnings, which is always lower than what traditional sportsbooks take.
Although Prophet will be exiting the New Jersey market, it does not signify the end of the company. Jake Benzaquen, the founder and chief operating officer, stated that the closure of their operations in the Garden State is merely a temporary setback.
He said that Prophet Exchange will be “back in more states soon”
Interestingly enough, New Jersey is currently stands as the sole state that permits exchanges legally. However, other states are contemplating proposed legislation to adopt this model. In a similar vein, Colorado has recently sanctioned regulations to facilitate exchange wagering.
However, the company does have a presence in additional states, including Ohio. In Ohio, the company introduced its peer-to-peer betting services following the legalization of sports betting last year. It has formed a partnership with the Columbus Blue Jackets NHL franchise in the Buckeye State.
In the meanwhile, Sporttrade will now be the sole sports betting exchange in New Jersey.
What is a Betting Exchange and How Does it Work?
A betting exchange functions as an open marketplace where individuals looking to place bets on different sides of a game can connect. Unlike a conventional sportsbook that accepts bets and sets odds, exchanges offer a platform for bettors to engage in peer-to-peer wagering. Thus, players can just bet amongst each other instead of using a third party to take their wagers.
Here is how they work:
Matched Betting: In a betting exchange, if one bettor wants to back Team A to win, the exchange matches their bet with someone betting on Team A to lose. This creates a matched bet.
Lower Commissions: Betting exchanges typically charge lower commissions compared to traditional sportsbooks.
Innovation in the US: While the US market is still catching up, there are startups like Sporttrade and Prophet Betting Exchange that offer exchange betting. Sporttrade, for example, provides a stock market-like experience for buying and selling positions on sports outcomes1.
While betting exchanges won’t replace traditional sportsbooks, they offer unique advantages. Thus, bookie experts expect them to become more popular in the industry.