A legal sports betting exchange is drawing the interest of investors.
Novig — a commission-free sports betting exchange — has closed a $6.4 million seed funding round ahead of its launch in Colorado later this year. Led by investment firm Lux Capital, the round included Innospark Ventures, True Culture Fund, Soma Capital, Dropbox co-founder Arash Ferdowsi, NFL legend Joe Montana, venture capitalist Paul Graham, and others.
"Novig is an absolute game changer. The future of sports betting is here," said Montana.
Why the hype?
The exchange takes a different approach from traditional sportsbooks by allowing users to bet directly against one another or the market rather than a sports betting operator. Novig aims to provide a fair sports betting experience for its users while closing margins for profitability.
As a betting exchange, Novig will be able to generate revenue through institutional traders, data monetization, and market making. Its launch in Colorado will be supported by a 10-year partnership with casino owner Full House Resorts and its Bronco Billy's Casino property.
The emerging sports betting exchange prepared for its upcoming launch in October with a beta test. The test saw roughly 200 users use Novig over a two-week period. During that span, more than 15,000 orders were placed across 1,290 markets. In October, the exchange will go live in Colorado with a slew of MLB, NFL, and NBA markets. Those markets include moneyline, point spread, game totals, team futures, and in-game wagering.
Following suit
Novig is the latest entry in the emerging sports betting exchange market. Last month, STX launched in Ontario, becoming the province’s first sports betting exchange. STX, which has partnered with the U.S. Integrity monitory service, also plans to launch online sports betting sites outside of Ontario.
Earlier this year, Prophet Exchange raised more than $10 million in funding. The company is the first licensed peer-to-peer sports betting exchange in the U.S. Prophet Exchange, which has market access in New Jersey and the United Kingdom plans to use the fresh capital to expand and reach profitability.
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