|Peer to Peer (P2P) betting – whereby a betting exchange matches bettors with other bettors – has taken Europe by storm. Now online betting companies are hoping that the US “March Madness” Basketball tournament will do the same for P2P in the US.|
In Europe, industry leader Betfair.com says it arranges 12,000 wagers per minute at peak times. But most companies active in P2P operations in Europe and other markets have declined to take wagers from American bettors, fearful of violating the Wire Act – a federal law that bars the use of telephone lines to bet on sports contests.
“March Madness is going to be huge,” said John Delaney, CEO of year-old TradeSports.com, one of the companies hoping that Americans will catch on to the P2P model.
Simon Noble, CEO of BETWWTS.com in Antigua, which is showcasing its newly revised P2P platform by waiving all trading commissions through the end of March, said P2P betting is ideally suited to the Internet.
P2P betting functions just like a financial exchange, with the laws of supply and demand setting the odds as rather than a bookmaker. This offers the bettor better odds than bookmakers can usually offer and the ability to hedge, or lessen risk, by placing counterbets while a contest is in progress.
TradeSports charges a commission of 4 cents per contract on both the purchase and sale, which typically amounts to 1 to 1 ˝ percent of the amount wagered.
However, traditional online bookmakers think that P2P could prove too unfamiliar to US punters.
When BETWWTS introduced its P2P exchange last year, the company found that recreational bettors were reluctant to try European-style P2P wagering because of its unfamiliarity, Noble said. BETWWTS is using March Madness to debut its revised person-to-person wagering platform. Instead of the 0-to-100 format, the new interface uses traditional sports book-style odds lines while still allowing bettors to trade while play is in progress and to wager on `both sides’ of an event.