Smarkets, the alternative betting exchange to Betfair and Betdaq saw group profit increase 160 % to £13.7m in 2016 with revenue increasing by 144% to £25.4m
Normally, when a bookie posts stellar results and announces that £2.7bn worth of bets were placed, the first thought an analyst has is “those poor punters”.
So what’s actually good for Smarkets is sophisticated gamblers who either trade the sports in play or simply want better odds on straight bets.
Chief executive Jason Trost said:
“Our mission is clear; we are striving to establish ourselves as a top-tier technology company. I strongly believe that the results of the past two years show the positive trajectory of the business, demonstrate our significant growth opportunities and confirm our ability to challenge an industry ripe for disruption.”
Smarkets (read our Smarkets review) do claim that they are disrupting an industry but truth be told the online gambling industry was disrupted a long time ago by well deserved industry leader Betfair.
However, what Smarkets are doing is winning business by reducing commission to 2%. This is in comparison to Betfair’s 5% starting commission rate.
Betfair was of course around before the current fintech revolution where founders are using the efficiencies of fintech and influx of investment o undercut industry leaders with lower fees. So yes, Smarkets is a good thing.
It’s a bit like Uber, it’s good for the consumer because you get better odds and it’s good for the liquidity providers because profit margins can be increase because there is another playing in the field creating more competative pricing.