Sports betting exchange Novig has announced the completion of a seed funding round totalling $6.4 million ahead of its prospective launch in Colorado.
Novig claims in a release that “the recent investment comes at a critical time. $300 billion is wagered in the US each year, all of which is bet against retail sportsbooks,”. The company continues to lament the traditional operator model, adding: “which have egregious 7-10% margins, discriminatory and inefficient practices, and a stale betting experience”.
Vigorish, by definition, is the fee charged by a bookmaker for accepting a gambler’s wager. The name Novig points to the company’s main selling point: eliminating the need for a sportsbook by allowing users to “bet directly against friends or the market”. It argues that exchange betting is more efficient, fair, and profitable.
Novig is set to monetize through three main avenues: institutional traders, data monetization and internal market making.
The company’s round included a plethora of investors, from high-profile tech investors through to those of NFL fame. The most famous name from the sporting world is Joe Montana, NFL Hall of Fame Quarterback. He commented “Novig is an absolute game changer. The future of sports betting is here”.
“We’re honored to have the support of so many of the world’s leading tech investors, who believe in our mission to democratize sports betting for good.” co-founder Jacob Fortinsky, stated. He continued, “Our vision is clear: to reshape the sports betting landscape that has long favored exploitation over innovation, and to usher in an era of integrity, transparency, and empowerment. Together, we’re rewriting the rules and putting the power back in the hands of bettors.”
He added: “We’ve been overwhelmed by the positive reception of our product from Novig’s first users and are excited to bring our product to regulated markets beginning this fall in Colorado.”
Ahead of its prospective Colorado launch, Novig has signed a ten year partnership with Full House Resorts.
There’s existing legislation for both retail and mobile sports wagering in Colorado, but the state is the first attempting to establish rules specific to the regulation of sports betting exchanges. In June, the Colorado Gaming Commission voted 3-1 to delay adopting new rules specifically attempting to regulate sports betting exchanges. The main stalling point was believed to be the taxation of sports betting exchanges.
Currently, New Jersey is the only state in which sports betting exchanges are operational. There are several other states exploring. For an exchange to flourish, the total addressable market needs to be substantial so the trading liquidity is there. New Jersey sports betting is the biggest (by all-time handle) in the country, but whether a state with over 3 million less residents than NJ will provide enough liquidity, especially given the amount of potential competition.