Nov 9, 2022

The Future of Sports Betting

Every February, I place a few bets on the following year’s Super Bowl as soon as the odds are available. I’m a huge NFL fan with a background in data science. Years of playing fantasy football, DFS, and betting have given me a feel for judging teams and players that are over- and undervalued relative to the public discourse.

The story of Frontrunner began in 2019 when I placed a $50 bet on the SF 49ers to win Super Bowl LIV at +4500 (45 to 1 odds) the day after Super Bowl LIII. As a fan who had spent every Sunday and countless other hours watching and analyzing the NFL season, I truly believed that they were undervalued, especially relative to the other long shots at similar odds. Despite being one of the worst teams in the league, they were projected to take Nick Bosa second overall and had significantly underperformed due to their QB getting injured among other things. To the average person they may have seemed like just another mediocre team but I felt as though they had significant upside at their odds.

Fast forward 11 months and it turned out that I was right! The 49ers ended up making the Super Bowl and entered the final game of the season at +100 to win (basically even odds). My excitement about my bet had been building all season but I soon realized that despite my original thesis being correct, there wasn’t a good way to ensure that I profited from my original bet. My only options were to hedge by betting additional capital on the Chiefs to win or to sell my bet directly back to book at about 70% of its implied value.

This made me realize: despite the recent growth of online sports betting, the underlying sports betting format has remained mostly the same since the days of betting with your street corner bookie. Bettors are still unilaterally given prices (or odds) by their bookie and are essentially betting against their bookie; a relationship that disincentivizes bookies giving bettors ways to maximize the values of their bets.

As one of the many people who had learned to trade stocks, options, and crypto through consumer trading apps like Robinhood and Coinbase, this felt wrong. The idea that I could take an initial position but effectively not close it out when I wanted to went against everything I had learned trading in transparent and liquid markets. Sports fans, media personalities, and league analysts already talk about buying low and selling high on teams and players. Why can’t we make betting on sports feel more like actually trading on a stock or crypto exchange? How do we create fair and liquid sports betting markets that are fun and easy to use? There must be a better way to invest in our sports knowledge and beliefs.

Betting Exchanges and Prediction Markets

With the goal of reimagining the sports betting experience, my co-founders and I started exploring exchange-style betting, which led us to betting exchanges and prediction markets. Betting exchanges had carved out a decent business for themselves in Europe. Betting exchanges like Betfair were great for betting on sports like soccer, but still used an outdated betting interface that made finding and placing bets a pain. Separately, there were a handful or so of centralized and decentralized prediction market style products around the world, but none were satisfactory when it came to having good sports coverage, liquid markets, and modern UX. Prediction markets were generally simple to understand and navigate, but had issues varying from being too narrow in scope to cover sports (PredicitIt or Iowa Electronic Markets) to being too generalized to attract sports fans (Polymarket, Kalshi) or simply lacking liquidity and usability (Augur).

We realized that a decentralized prediction market focused on sports markets could take the best features of betting exchanges and prediction markets and combine them with innovations from DeFi to create a new and better format for betting on sports.

The Idea

All of the above led us to build Frontrunner. Frontrunner is a decentralized sports prediction market where users can buy shares of sports propositions and trade them like they would on any other stock trading platform. Imagine having shares of the Yankees to win the World Series that can be freely bought and sold as they over or underperform over the course of the season rather than betting once and hoping for the best. Unlike traditional sportsbooks where users place a bet and wait, Frontrunner gives users full control over their portfolios, allowing them to dynamically shift their positions as the situations change and more information is presented to them.

In the end, we’re building Frontrunner to meet the needs of the modern sports fan and bettor. By leveraging the power of free markets and the blockchain, we create transparent markets and liquid positions to reduce counterparty risk, create new types of sports-related markets, and fundamentally change the way in which people invest in their sports knowledge and beliefs. Frontrunner is currently live on testnet and our mainnet launch is planned for 2023. I hope you all will come along with us as we build the next generation of sports engagement!

About Frontrunner

Frontrunner is a decentralized sports prediction market where users can buy shares of sports propositions and trade them like they would stocks. Unlike traditional sportsbooks where users place a bet and wait, Frontrunner gives users full control over their portfolios, allowing them to dynamically buy and sell positions as the odds change. By leveraging the power of free markets and the blockchain, we create transparent markets and liquid positions to reduce counterparty risk and fundamentally change the way that people invest in their sports knowledge and beliefs.