Smarkets is best known as a sports betting exchange, but with exchange betting unviable in the US for the foreseeable future, the company operates as a traditional sportsbook in the US under the SBK brand.

It’s been a slow slog for Smarkets in the US. SBK Sportsbook currently offers sports betting in Colorado, with plans to launch Indiana online sports betting in the near future. But that pace could soon pick up.

Is Smarkets Poised For US Sports Betting Growth?

According to a , Smarkets has secured a significant minority investment from Susquehanna Growth Equity (SGE). The funding round is the company’s first since 2013 when the company raised $5.4 million. The investment “will allow Smarkets to accelerate its rollout in the US,” and globally, the press release states.  

Per the press release, the new investment will contribute to:

• Furthering the company’s US presence, including market-access deals in new, regulated states
• Capturing an even greater share of the UK betting exchange market and accelerating SBK’s growth in the UK’s mainstream sportsbook market
• Expanding Smarkets’ development of new products for customers and focus on industry-leading prices on sports, politics, and current affairs
• Continuing to capture the best and brightest worldwide engineering talent with a view to doubling headcount by the end of 2022
• Further expansion into new and recently entered markets such as Denmark and Sweden

The Smarkets Difference

Smarkets is an interesting company and one of a select few sports betting companies offering a distinct product.

Smarkets’ entire operation is handled in-house, but the biggest differentiator is its business model. As CEO Jason Trost previously told Betting USA:

“Pretty much all of our other competitors think of sports betting as an entertainment business. We think of sports trading as an asset class and are trying to build technology that treats it like that.”

“For traditional wagers, the average hold in the UK is like 8%, and in the US it’s like 6%. We’re trying to do a hold of 1%, so it’s not just a little better, it’s shockingly better. If our competitors are -110 and we’re -102 I think a lot of people are going to be interested in that.”

The company is facing two significant hurdles in the US:

1. A lack of brand recognition.
2. The US landscape being unfavorable to exchange betting – Smarkets core business.

 The funding round can help on the brand recognition front through market access and advertising. But, unfortunately for Smarkets, there is little that can be done to solve the second problem. Exchange betting requires liquidity, something the ring-fenced customer bases in individual states can’t support.  That helps explain why Smarkets .

Comments from Smarkets and Susquehanna

 Jason Trost, founder and CEO of Smarkets said:

“This is an incredibly exciting day. I’ve always been amazed what the passion and energy of a comparatively small group of committed people can accomplish against much bigger rivals; Smarkets and SBK are the product of exactly that. At Smarkets we have always been guided by our vision of fixing betting with the best prices and products, and SGE is just as excited as us to challenge the status quo. This is a huge endorsement of our technology and will allow us to further upend the industry by offering bets as close to fair value as possible.

“We are super proud of what we have achieved so far in the UK betting space, and this new investment will help take us to the next level and beyond in the UK, US, and other international markets. I’d like to thank the women and men that work and have worked at Smarkets for getting us to where we are.

“I truly believe the best is yet to come. This investment will allow us to fight with greater resources, move faster, and be bolder in our mission. We’re so excited about the opportunities this investment unlocks.”

Scott Feldman, Managing Director with Susquehanna Growth Equity, said:

“We are delighted to be able to join Smarkets on their upward journey. We immediately identified with their vision of using technology to take on the betting industry’s big operators by providing the fairest odds in the world and maintaining a clear focus on product excellence.

“Smarkets have achieved a huge amount with little investment to date and we can’t wait to see them go from strength to strength as they expand further into both the US and UK mainstream market.”