TradeSports.com a New Type of Fantasy Sports League Where Salary Cap is Eliminated

Written by:
Thomas Somach
Published on:
Feb/16/2015
TradeSports.com a New Type of Fantasy Sports League Where Salary Cap is Eliminat

NEW YORK -- Your state lottery never pays you to try out one of its new scratch-off tickets.

And your local casino never hands you free cash to sit down at the poker table with.

And most certainly your local neighborhood bookie never calls you up and tells you he's going to start paying you to make bets with him on sporting events.

But when it comes to the crowded and cut-throat world of fantasy sports, anything you can do to rise above the din and garner attention is a plus.

Even if it means doling out free cash!

But that's just what one up-and-coming sports fantasy league is doing--it's paying customers to play with them, by giving them free cash to play with.

The name of the league is Tradesports (www.tradesports.com) and it's run by Ron Bernstein, who is the chief executive officer.

Gambling 911 caught up with him last week in the Big Apple to find out more about his operation, how he got there and why the heck he's giving out free money.

Here is a transcript of that interview:

Gambling 911: How does your fantasy operation work and how is it different from the many other fantasy leagues out there? What states and countries are you legal in and how do you stop players who are not in those locations from joining? And what is the age limit to join and how do you verify that?

Ron Bernstein: Tradesports is completely new way to play fantasy sports for real money. Instead of picking players for a roster with a salary cap, you make yes/no predictions about what you think is going to happen. It's like instead of assembling a team, you assemble a portfolio of stocks. If you pick the right stocks in the right amount compared to everyone else, you win! We permit players from 40 states only, where skill-based gaming rules are clear. We use a third-party age and ID solution, which validates on a player by player basis.

G9: How much does it cost to join and what do you get for your money?

RB: Joining Tradesports costs nothing. We have free games and real-money games. In fact, if you live in one of the 40 unrestricted states, we actually give you $20 to join contests with so you try us out with house money. All the contests have different entry fees and prize structures. Entry fees range from $2.20 all the way to $265.

G9: Why is your operation legal and why isn't it considered gambling? Is there really any difference between guessing which team will have a good day and win a game, which is gambling, and guessing which players will have good days, which is legal fantasy play?

RB: Fantasy sports games like ours are not considered gambling because the contest outcomes are based on skill. Skill-based games are legal for real-money prizes in the U.S. at the Federal level and permitted in most states too. It's true there's little difference in the scenario you describe, but the main point about fantasy permissions and betting permissions is to assure that these contests can't hurt the integrity of sports. To do that, the outcome has to be related to a plurality of outcomes so that no one factor--that is, player--can determine a contest prize winner.

G9: How did you get into the fantasy sports business? Can you tell us about your personal background?

RB: I was a commodities floor trader for 25 years. When I was in the pits, we always talked about why can't we trade sports just like cotton? We made it happen and set up our first version called the Global Sports Exchange in 1999. We moved that to Ireland in 2000, and then launched the original Tradesports in 2003, which was a person-to-person betting exchange back then.

G9: How are you preparing to compete against the commercially successful DraftKings and FanDuel?  Both companies have attracted significant investment monies recently, so are you preparing to do the same?

RB: Commercially successful or commercially popular, that's the zillion-dollar question. No doubt they've put up high hurdles already and have massive war chests to advertise with. And they're smart. But at the end of the day, more true now than ever, if you have a great idea that people want, you can make it work. We have a little more work to do on the game and on our mobile version and we are learning a lot about customers too. We'll be ready to pour fuel on the fire soon and we know it takes time and money to rise above the noise.

G9: What has been the growth rate of your business in the last year? And what is the driving force behind that growth? Has the media coverage fantasy is getting translated into a boost for your own business?

RB: We launched in May of 2014 with real-time trading games, but learned in our first three months that most people didn't want to be glued to a trading screen for our contest format for three-plus hours for a long baseball game. Most of our players preferred a set it and watch game, so we refocused more on that and came out with our second version last fall. The driving force seems to be overall interest in real-money action. Our customers seem to want to bet on sports but cannot easily do so. And they like our strategy aspects too. For now, legal fantasy games are the alternative. Media and advertising has certainly helped, but it's helping the big boys more than the little guys right now.

G9: Can you compete with the likes of ESPN and Yahoo should they enter daily fantasy sports, as is rumored?

RB: Yes, we can compete. Anyone can compete, especially in modern times. Players want to play the best game with the best returns for fun or for money. We can offer that game. It may take longer for the right amount of customers to find us and play with us, but we're here for it. Obviously ESPN and Yahoo have the brands, great assets, great synergy and huge installed user bases that will make for spirited competition between them and current game operators. But these are not angel round start-ups, this is a serious high-dollar, marketing-driven battlefield, and we're David against Goliath right now.

G9: Would it make sense for a fantasy company like yours to team up with an online sportsbook partner, such as Bookmaker.eu or Sportsbook.ag out of Costa Rica or one of the European books such as Paddy Power of Ireland or William Hill of the U.K.?  Such a partnership would give you a ready-made customer base of sports-betting fanatics, so have any such companies approached you or vice-versa?

RB: Definitely and I can't talk much about that right now.

G9: Where are you based and why have you chosen that location? And are you considering branching out into other locations?

RB: I live in New Jersey and work in New York. Others on our team are all over--Brooklyn, Connecticut, New Jersey, Dublin and Prague.

G9: What do you see as the fantasy highlights of 2014, both the highs and the lows? For example, what players have crushed your customer base and who are the big money-makers so far?

RB: I think the story is the overall growth and then late in the year the more high-media profiling and acceptance of these games. Then Adam Silver (announcing support for sports betting). People want to play, full-stop. We have some really cool customers, they give us smart feedback and useable ideas. I guess they see us as having a 'soft game' right now, but we know no one has a perfect strategy yet. And at the end of the day, good players have to make smart picks to win.

G9: What is the most money anyone has earned playing with you?

RB: We have a few players that have taken out $2,000 over consecutive weekends. That's been growing too.

G9: Do you have many female players? What percentage of your customer base is female? Are there any significant differences in the way female customers play fantasy as compared to male players, as far as strategy, tactics and expectations are concerned?

RB: I haven't seen a difference in strategy between men and women. Women are 1 to 2 per cent of our user base, but we expect women to be more interested in our game because the research is more focused at a higher level, on just teams and key players. We are also expanding into things like the Oscars, the movies and even The Bachelor, so we have some content and games women will love but have never seen before.

G9: What is the basic demographic of your paying customer? If it mirrors the demo of the average American sports bettor, it would be white and male with a high level of education and income, although the age for fantasy players would be lower on average than the age for sports bettors. How accurate is that assessment?

RB: Pretty accurate for us. We skew a little higher than the fantasy player in age and income, but the demo isn't a great surprise to us.

G9: Where do you expect fantasy in general and your company in particular to be a year from now? Do you expect legal sports wagering to become more widespread in the U.S. in the coming years? If you do, how would that affect fantasy?

RB: Remember, we used to operate Tradesports.com from Ireland as a person-to-person betting platform. It's clear that there's a ton of pre-branding going on right now in preparation for regulatory changes in sports betting. There's plenty of conversation about it. I'm confident it's not going to be completely overhauled next year or the year after, but it's coming.

G9: Online sportsbook operators say it's hard to reel in affiliate partners who are used to making crazy earnings with sportsbook, casino and poker affiliate programs. How does your company look to compete in this area? What are your marketing plans? Is there an off-season or does Major League Baseball actually represent a peak in revenue potential, as opposed to the decline we see with sportsbooks?

RB: We haven't done affiliate programs so far, as we don't know about them well enough. We are commercially minded and open to anything that makes sense.

G9: Do you plan on pushing your software as a white label product to potential partners and operators?

RB: We could, and we get that a lot about Intrade.com and real-time trading, but it's never made sense so far.

By Tom Somach

Gambling911.com Staff Writer

tomsomach@yahoo.com

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