Sporttrade Gets Sports Betting License in Virginia Ahead of Planned October Launch

Sporttrade announced Wednesday that it has received licensing approval in Virginia, gaining sports betting market access in its fifth state nationwide.

Despite making the announcement hours before the start of the NFL season, Sporttrade does not plan to launch in Virginia until sometime next month. The WashingtonCommanders face a difficult schedule in October with matchups against the Ravens, Browns and the Bears – three potential playoff teams. The Commanders’ team facility is located in Ashburn, Virginia, about an hour northwest of the nation’s capital.

The proximity to Washington, D.C., provides fertile ground for bettors across the Commonwealth. Washington is one of the only cities in the nation that is home to teams in the top four North American sports and Major League Soccer. In June, Virginia ranked ninth nationally with a handle of $415.4 million, according to figures compiled by Action Network, topping neighbor North Carolina by more than $15 million.

The Sporttrade Economic Rating

Virginia, which went live with online sports betting in January 2021, has more than a dozen licensees in the Commonwealth.

When Sporttrade evaluates whether to enter a certain market, the company will weigh a litany of factors, ranging from the size of the market to the cost of a license, along with revenue sharing expenses, loss carryforward provisions and deductions on promotional expenses. In many respects, Sporttrade will benefit from second-mover advantage in Virginia.

As the U.S. sports betting market continues to consolidate, Virginia licensees such as WynnBET, Unibet, and SI Sportsbook have shuttered online sportsbook operations in the state. In July, Betway closed its sportsbook in the U.S., while U.K.-headquartered Betfred has downsized operations in North America. While Betfred remains in four states, including Virginia, USA CEO Kresimir Spajic hinted last month that a full departure from the U.S. market “could be on the table.”

Sporttrade brings a stock market-style approach to sports betting, allowing bettors to trade in and out of their positions just as a shareholder can with a security. Before entering a state, Sporttrade conducts a detailed competitive analysis of its rivals in a given market, CEO Alex Kane told Action Network. As mid-sized operators pull out of Virginia, Sporttrade may benefit from the recent closures, and it strives to provide its customers with the most favorable pricing on the market, drawing bettors away from industry heavyweights that charge a larger vig.

There are other advantages for Sporttrade in waiting to enter Virginia. The state initially allowed sportsbooks to deduct all bonuses and promotions for tax purposes, but an amendment passed under the state’s 2022-24 budget limits companies from deducting promotions for only their first 12 months of operations.

The amendment impacts the nation’s largest sportsbooks, including FanDuel, DraftKings and BetMGM. Betr, which went live in Virginia last September, can deduct promotions through this Friday. Without the deductions on promos, the tax rate is approximately 40% higher, Kane estimates.

When all of the outputs are factored, Sporttrade compiles an index of the most beneficial states in which to gain market access. Virginia places highly on the so-called "Sporttrade Economic Rating," ranking ahead of states such as Massachusetts, North Carolina and Ohio that generally produce a larger monthly handle. The index also ranks Virginia higher than other prominent states, including Indiana, Kentucky, Louisiana and Illinois, a high-tax jurisdiction.

"Our analysis normalizes for all of the outputs, Virginia is just a no-brainer state for us," Kane told Action Network.

Preparing for Football Season

For the start of the NFL season, Sporttrade is offering a bevy of markets, including spread and moneyline wagers for Week 1, player props, division champions, wagers on each team to make the playoffs and Super Bowlfutures.

Sporttrade has pivoted somewhat from its first incarnation in September 2022, when the company billed itself as the Robinhood of sports betting. Two years later, Sporttrade has placed a greater emphasis on in-game betting and pricing.

In the two states where Sporttrade offers exchange wagering, New Jersey and Colorado, customers have the ability to purchase a so-called "limit order." A limit order is one that allows a user to buy or sell a trade at a certain price. Once a limit buy order is matched with a seller, the order will be executed at the limit price.

In those states, bettors also have the option to negotiate for a better price. For instance, this week a customer requested a better price on a $5,000 Cubs' order at -120. Sporttrade granted the request, lowering the price to -117. The option is not available for customers in Iowa and will not be available for customers in Virginia. Players in states that don't yet allow exchange wagering, are not able to ask for a better price through the app (via limit order). Those players must do so manually. In states that do allow exchange wagering, players can ask for a better price manually and through a limit order.

For exchanges like Sporttrade, market makers serve a critical role. With multiple market makers competing to offer higher limits and efficient pricing, Sporttrade believes it can offer better prices than traditional sportsbooks. Market makers guarantee to the exchange that they will buy and sell all of the listed outcomes at a certain spread.

Take, for instance, Friday's NFL tilt in Brazil between the Eagles and the Packers. As of Wednesday afternoon, a Sporttrade customer could purchase a buy order on the Eagles at -135, or five cents cheaper than the price offered at BetMGM, ESPN BET and Caesars. On the other side, a Packers' backer at Sporttrade received a moneyline price of +120, one that is more favorable than the +115 offered at BetMGM.

In many cases, the pricing at Sporttrade will be more favorable to the customer from the outset, according to Kane. Before Tuesday's opening pitch, Sporttrade offered an identical -104/-104 price on the Marlins-Nationals matchup. At traditional sportsbooks, the Marlins opened as -115 moneyline favorites, a price that increased to -116 at FanDuel and reached as high as -117 at Bally Bet. The prices factor into the commission Sporttrade receives on winnings.

Before Thursday's Chiefs-Ravens NFL opener, Sporttrade has ramped up its marketing efforts. In New Jersey, Sporttrade has begun to promote a roadside billboard with the tagline: "The expressway to -104 lines."

"We are truly marketing this product because we feel like it's finally reached the maturity level to be successful and to be a captivating option for the premium player," Kane said.

Besides Virginia, Sporttrade gained market access in Arizona earlier this summer. Kane expects to go live in Arizona by mid-September.

Chris Altruda contributed to this story